During its first-quarter earnings call of 2016, Starbucks revealed 21 percent of its transactions are conducted on a mobile device. That number hit 22 percent in December 2015. During peak business hours, 10 percent of orders are purchased via Starbucks' mobile app.
The coffee company's mobile app processes 6 million transactions per month. Starbucks hopes to expand this service to more cities and countries worldwide, eyeing China as a potential major mobile market. During the call, Starbucks announced 40 percent of Chinese transactions were paid by the Starbucks loyalty card, according to PYMNTS.com. The company also mentioned 11.1 million people hold the card worldwide – a number up 23 percent from 2015. A total of $1.9 billion was loaded to American and Canadian cards during Q1 2016.
Multiple payment options
Part of Starbucks' success is its ability to provide multiple payment options. While mobile certainly provides a lot of sales, it doesn't account for all of them. Overall, Starbucks' broke its own records to reach $5.4 billion in revenue this first quarter, Schultz said during the call.
"… We are delivering quarter after quarter of record-breaking financial and operating results despite the accelerating shift in consumer behavior away from traditional bricks and mortar retailing …" he said in the call.
Starbucks noted this shift and adapted accordingly, pushing its online and mobile payment options. Coffee enthusiasts can easily preorder their drink, pay online and collect their purchase in stores. Mobile and electronic payment solutions are what make Starbucks so convenient.
According to Practical Ecommerce, multiple payment options increase conversion rates for e-commerce businesses. Some consumers are more wary of certain payment methods than others, especially when submitted online. They're afraid making e-commerce payments leaves them vulnerable to identity theft or security breaches. By providing more payment options, you increase the likelihood of these customers finding a method they are comfortable with.
When deciding which payment services to offer, Practical Ecommerce suggested ignoring usage statistics. For instance, you may find only a handful of customers on your site use direct debit, but those could be the source of the bulk of your revenue. Direct debit could also be the preferred method of your most loyal shoppers. It's much more important to determine how much in profit each payment option brings in rather than the number of people using it.
Although mobile payment has proven itself to be popular, e-commerce businesses shouldn't ignore alternative options. The more payment methods you provide, the more your customers will be satisfied.
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