Dive Brief:
- The Starbucks Rewards loyalty program reached a record 34.3 million active U.S. members in Q1 2024, the company said Tuesday in an earnings release. Membership was up 13% year-over-year for the quarter, which ended Dec. 31, 2023.
- Starbucks is building on its loyalty offerings by using its Deep Brew data analytics and AI platform to identify specific Rewards member cohorts to offer relevant shopping incentives, CEO Laxman Narasimhan said on the earnings call.
- Starbucks Rewards will also be key to turning occasional customers into regulars through new features, according to Narasimhan. The company is adding better personalized communication, expanding ordering options and entering a yet-to-be defined partnership with Bank of America.
Dive Insight:
Starbucks is leaning into its app, putting an emphasis on digital options to drive new loyalty signups and encourage more business from existing members.
The app’s mobile order and pay capabilities were used for more than 30% of all purchases, according to Narasimhan. Additionally, Starbucks Rewards members visited cafes more frequently and spent more per visit than ever before in Q1.
Starbucks will continue to improve its app to maintain its momentum. Plans include providing the ability to use a personal cup and more accurate order wait times for mobile orders, Narasimhan said.
“We're also laser focused on ensuring our customers can personalize their orders in whatever way they want,” Narasimhan said during the call. “One example is helping customers find products based on dietary needs.”
The company will also offer new delivery time windows.
Starbucks and delivery provider Gopuff have launched a pilot program delivering overnight orders, according to Narasimhan. Starbucks will train baristas in Gopuff’s micro-fulfillment centers and deliver to customers who made orders between 5 p.m. and 5 a.m. in about 30 minutes.
The new delivery options will help make Starbucks more accessible to all customers and its personalization improvements will provide elevated experiences, according to EVP and CMO Brady Brewer.
“We talk a lot about our personalization capabilities at Starbucks, but truly that job is never done because as new technologies and capabilities come online, we are grabbing those and integrating them into our system,” Brewer said on the call.
