The world of business banking may have just become significantly more grande: a new report, originally featured by Businessweek, shows that worldwide coffee chain Starbucks has become one of the world’s more sizeable stores of wealth. The value of cash stored in Starbucks’ mobile payments app and gift cards was noted in an internal report to exceed $1.2 billion – this is a relative pittance compared to the assets of major North American banks, but it outweighs the deposit holdings of some smaller financial institutions. More impressively, this figure has approximately doubled since 2014. The stored value in cards and mobile payments does not immediately create revenue, but it can be invested, driving growth and returns. In short, Starbucks has reinvented itself not as a coffee company, but as a mobile commerce company with a considerable investment in digital loyalty.
The integration of payment solutions into Starbucks’ digital loyalty-powered user experience speaks volumes about the direction that consumers are taking toward daily life as cashless buyers and digitally-integrated shoppers. Though it has evolved orders of magnitude away from its roots as an independent small business in Seattle, Starbucks’s success in the digital and mobile arena serves as a compelling case study for the small business owner or entrepreneur looking to get the most value out of their payments and loyalty systems. It shows that businesses of any kind need to pay attention to the mobile-compatibility of their web and sales presence in ways that go beyond marketing or outreach, instead using mobile tech to help improve service at all stages of the customer life cycle.
Mobile users compare, contrast, purchase and pay with their devices – and the technology needed to enable a small business to take advantage of this device-centric flow of commerce is not necessarily complex or prohibitively expensive. Starbucks has built a tremendous base of customer loyalty not only by providing incentives or rewards, but by making the point of sale transactional process easier in many ways. They have benefited on the bottom line by effectively converting this loyalty into something that can be monetized, much in the way that one might create a subscription service or other form of recurring, predictable revenue. Loyalty programs are, therefore, not just about creating the incentive for repeat visits anymore. In a mobile-centric world, they have as much to do with the creation of convenience as they do with the provision of rewards.