Starbucks to capitalize on record loyalty membership with app improvements

In the Q1 2024 earnings release on Tuesday, Star reported a record 34.3 million active members in the U.S. Starbucks Rewards loyalty program, marking a 13% year-over-year increase by the end of the quarter on Dec. 31, 2023.

CEO Laxman Narasimhan highlighted the utilization of the Deep Brew data analytics and AI platform to identify specific cohorts among Rewards members, enabling the offer of tailored shopping incentives. Narasimhan emphasized the importance of Starbucks Rewards in cultivating regular customers through enhanced personalized communication, expanded ordering options, and a forthcoming partnership with Bank of America.

The company is placing a strategic focus on its app, leveraging digital options to drive new signups and boost engagement from existing members. Notably, more than 30% of all purchases utilized the app’s mobile order and pay capabilities in Q1. Starbucks aims to further enhance the app, allowing the use of personal cups, providing more accurate order wait times for mobile orders, and enabling customers to personalize their orders based on dietary needs.

To meet evolving customer needs, Starbucks plans to introduce new delivery time windows. A pilot program with delivery provider Gopuff involves training baristas in Gopuff’s micro-fulfillment centers to deliver overnight orders to customers who placed orders between 5 p.m. and 5 a.m., promising a 30-minute delivery time. These initiatives aim to enhance accessibility for all customers and elevate personalized experiences, according to EVP and CMO Brady Brewer. Brewer emphasized Starbucks’ ongoing commitment to integrating new technologies and capabilities into its system to continually enhance personalization.