Their growth plans can be summed up in the slide below. SBUX plans to increase stores from 21,000 to 30,000 by 2019. Growth will also be driven by food and lunch leveraging their La Boulange acquisition. Currently 46% of SBUX's business is in the morning but the rest of the day is where customers spend 85% of their money. The biggest news was SBUX's plan for mobile ordering and delivery.
Mobile order ahead or a coffee to your desk.
SBUX has 70 million unique US customers per month, 8 million of these are a part of My Starbucks Rewards their loyalty program. Starting in Portland SBUX will offer these customers mobile ordering. Mobile ordering will use geolocation to show users the closest cafe. It's expected to take around 5 minutes for the drinks and food to be ready after placing an order. They are also testing in select markets dedicated green apron delivery services which will be integrated in SBUX's app. Imagine being able to create a standing order of coffee delivered to your desk daily!
This is much more convenient than anything out there for customers who are typically in a rush during the mornings. This should lead to increased frequency of use. While for SBUX this will increase efficiency getting rid of ordering and payment bottlenecks while also increasing use of their reward programs. What Domino's did for pizza delivery SBUX is trying to do the same for coffee.
Mobile app payments are 15% of US transactions. While this is impressive 33% of tender in stores is prepaid mostly SBUX gift cards. $4 billion was loaded onto prepaid SBUX cards in the past year in the US. Gift card holders are able to convert their gift cards to their app making it a virtual gift card suggesting much more mobile growth. Also these rewards customers tend to spend 3x more than non rewards customers. As customers join their loyalty program SBUX gets more information about their habits and can better tailor marketing messages.
Not like other retailers
Most retailers are struggling with declining mall traffic as more consumers buy online (see below). Unlike other retailers SBUX is in the fortunate position of selling experiences that can't be found online. (It's hard to buy coffee online from Amazon.)
SBUX is a company that has become a daily habit for many. In a fast paced world (especially the morning) the addition of mobile orders and delivery of an already addictive product means SBUX will likely keep up its habit as a daily habit for it's customers.