Starbucks Card Mobile is a hit

By Jennifer Van Grove, Mashable

Grabbing a cup of joe got a whole lot easier this year. In January, Starbucks began accepting mobile payments via the Starbucks Card Mobile iPhone and BlackBerry applications at 6,800 company-operated stores. Today, the company revealed that more than 3 million people have paid using Starbucks Card Mobile.

The mobile payments milestone was presented by chairman and CEO Howard Schultz to shareholders during the Starbucks Annual Meeting of Shareholders at Marion Oliver McCaw Hall in Seattle.

"Starbucks now offers the nation's largest mobile payment network," vice president of Starbucks Brady Brewer added later in the meeting.

The Starbucks mobile payments offering is a "touch to pay" system. It allows the customer to hold up the app's barcode to the in-store scanner at the register to pay using the electronic tender. The program was piloted at select stores in September 2009. After extensive testing, it was found to be the fastest way for customers to pay.

The past financial quarter was the best performing in the 40-year history of the company, according to Schultz. Starbucks cards now account for 22% of all transactions, he says.

Mobile payments is just one element of a much larger social and digital media strategy that Schultz refers to as a "blueprint for growth." This involves the brand crossing over into the consumer packaged goods (CPG) category by leveraging its digital and social properties. Schultz was eager to inform shareholders that the Starbucks brand is number one on Facebook with 29 million fans, and is also a top brand on Twitter and Foursquare.

Schultz used Starbucks' new instant coffee brand VIA as proof of the crossover strategy. VIA generated $194 million in sales in its first year, and is now in 40 points of distribution.

Ultimately, Schultz believes the company's CPG business will rival its retail business — and that the Starbucks Card Mobile application will connect both sides of the brand's identity through loyalty programs.

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