In the quarter, Starbucks grew the number of “digitally registered customers,” from 6 million at the end of Q3 to 10 million at the end of Q4. That’s significant. Not just because it allowed Starbucks to engage with these guests directly via email with offers, like Happy Hour, but because of the possibility of Rewards conversions. Matthew Ryan, Starbucks’ chief marketing offer, said the chain began to see some of those digitally engaged customers take the next step. And, again, those locked-in loyal members drive higher check on average. “We continue to see year-on-year growth in spend per member. That is in the single digit range, again, and we're very optimistic about that because that shows that our members are in fact engaging, even the ones we've had for a long time,” he said.
“… we have to think of it as the top of the funnel—an enabler of the relationships that we can create that lead people eventually into the Starbucks Rewards program,” he added. “So we expect to see that continue to contribute to incrementality, but over time. It's not something that we would hang our hat on just yet. We're moving in that direction.”
This is just the beginning of the push for Starbucks. Brewer said, as the chain gets to know its digitally registered customers “and what they want,” Starbucks will be able to tailor specific offers with the goal of converting them.
“We're just beginning to send offers to this group of people. We have not yet begun to personalize and that's something we expect to do later this year,” Ryan said. “It's going to take us time to feel confident, attributing how much business comes from any particular segment of customers but we are very, very encouraged by the responsiveness we see to people who commit to a digital relationship. Remember that we're not in the business of creating digital relationships for digital relationship's sake.”
As this grows, Starbucks will become less reliant on media and more reliant on customers pulling information from the company.
“It's something that's a journey for us and we're going to continue to go down that pathway,” Ryan said.