The popular consumer brand is showing off its forward-thinking mentality.
Digital assets are taking the world by storm. Turn on the financial news or flip through the business section of the newspaper, and you'll most likely see something about cryptocurrencies. The potential to upend a range of industries is certainly what proponents are hoping for.
But evenStarbucks(SBUX -0.26%), a50-year-oldbusiness that operates in the physical world, is finding ways to incorporate the disruptive technology into its own business. And it could change how consumers interact with their favorite brands.
Here's just how innovative this coffee shop behemoth really is. It just might make you want to buy the stock.
Image source: Starbucks.
More ways to pay
Starbucks ended its latest quarter with 24.8millionmembers in its loyalty program, Rewards, in the U.S. alone, a 28% increase from the prior-year period. It's a widely held belief that the company has one of the most robust loyalty programs around. Launched in 2009, the program encourages repeat purchases, something any business would want. And because it's been around for so long, the sheer amount of data Starbucks has collected on consumer buying behavior is a competitive strength in and of itself.
Coffeelovers who load money onto the Starbucks mobile app to pay for beverages or food receive two points (or Stars) per dollar spent, while those who use cash or a credit or debit card get one point. In addition to being able to order ahead of time, Starbucks offers free birthday treats and frequently has other bonus challenges to rack up points faster. This works extremely well because coffee is one of those rare items you can buy every day.
To add even more ways to pay, Starbucks now lets customers pay directly withBitcointhanks to a partnership with digital-walletproviderBakkt. And customers can already convert their cryptobalancesonPayPalto fiat currency before reloading their Starbucks apps.
It makes complete sense from a strategic perspective to expand Starbucks' reach by reducing friction and making transactions an effortless digital experience. Loyalty members tend to visit often and spend more. A remarkable 51% of sales at U.S. company-operated stores came from Rewards customers.
Loyalty points exchange
As if introducing crypto wasn't enough, during theQ4 earnings call, management revealed an exciting new update to the program. "Through blockchain or other innovative technologies, we are exploring how to tokenize Stars [and] create the ability for other merchants to connect their rewards program to Starbucks Rewards," CEO Kevin Johnson claimed.
He highlighted a partnership already in placewithAir Canada, where the airline's rewards members can link their accounts with a Starbucks Rewards program and earn points from both companies with purchases made at the coffeehouse chain. "Over the next year, you will see the first instance of this loyalty points exchange with other consumer brands," Johnson added.
From a consumer perspective, this is fantastic. Being able to transfer the points earned from one merchant to another in an easy, seamless way completely raises the value of a Starbucks Rewards membership. It also encourages people to buy more coffee, knowing full well that it benefits them with other brands.
The CEO added: "This approach will also serve as a foundation for a more aspirational concept for new, modern payment rails that align payment expenses with the value received by customers and merchants." Investors should be excited that management is thinking like this and wants to push its way into the payments space.
These new developments prove that Starbucks is truly a tech-first business that is intensely focused on enhancing the customer experience. Shareholders will want to pay attention to any updates on this ambitious goal.
Neil Patel owns shares of Bitcoin, PayPal Holdings, and Starbucks. The Motley Fool owns shares of and recommends Bitcoin, PayPal Holdings, and Starbucks. The Motley Fool recommends the following options: long January 2022 $75 calls on PayPal Holdings and short October 2021 $120 calls on Starbucks. The Motley Fool has a disclosure policy.
FAQs
NASDAQ: SBUX
In short, it was a very profitable stock to own for a long time. However, the company has struggled recently. That's reflected in the stock's performance, which has lost about 22% in the last year compared to a 25% gain in the S&P 500.
Does Microsoft accept Bitcoin payments? ›
Microsoft: As a tech giant, Microsoft accepts Bitcoin for its services and products. This showcases the growing acceptance of cryptocurrencies in the technology sector.
Will Starbucks bounce back? ›
Having 11,000 additional Starbucks locations should boost revenue substantially. And assuming consumer demand remains resilient, the company should keep churning out profits. It's not unreasonable to expect all-time high revenue and profits for Starbucks five years from now.
Do people accept Bitcoin? ›
Key Takeaways. Retailers worldwide accept Bitcoin as a secure way to pay for goods and services. A limited but substantial number of companies accept direct cryptocurrency payments, while others accept Bitcoin and other tokens through third-party apps.
What if you invested $10,000 in Starbucks? ›
If you had invested $10,000 in Starbucks at its IPO price of $17, you would have purchased roughly 588 shares. Since then, Starbucks has split its stock 2-for-1 six times. Your 588 shares would now be 37,632 shares.
Is SBUX a good stock to buy? ›
Based on analyst ratings, Starbucks's 12-month average price target is $88.78. Starbucks has 10.70% upside potential, based on the analysts' average price target. Starbucks has a consensus rating of Moderate Buy which is based on 8 buy ratings, 18 hold ratings and 0 sell ratings.
What crypto does Starbucks accept? ›
To add even more ways to pay, Starbucks now lets customers pay directly with Bitcoin thanks to a partnership with digital-wallet provider Bakkt. And customers can already convert their crypto balances on PayPal to fiat currency before reloading their Starbucks apps.
Does Amazon accept crypto? ›
Does Amazon accept Bitcoin? No, Amazon does not accept Bitcoin directly. However, you can use Bitcoin and other cryptos to buy goods on Amazon via a crypto card or by using BTC to purchase an Amazon gift card.
Does Walmart accept cryptocurrency? ›
According to buybitcoinworldwide.com Walmart does not accept Bitcoin. But you can buy Amazon gift cards at Bitrefill with bitcoin and then spend at Walmart.
Why Starbucks is suddenly struggling? ›
CEO Laxman Narasimhan said during an earnings call that budget-conscious consumers have been more careful about their spending, which has taken a toll on guest traffic. Severe weather in the United States at the start of the year also negatively impacted sales as more consumers stayed home.
Starbucks stock price stood at $80.24
According to the latest long-term forecast, Starbucks price will hit $90 by the end of 2024 and then $95 by the end of 2025. Starbucks will rise to $100 within the year of 2026, $110 in 2028, $125 in 2029 and $150 in 2030.
Is Starbucks growing or declining? ›
Each of Starbucks' geographic segments reported a decline — including all-important China, where sales fell by 11%, and the home US market where sales fell by 3%. The chain seems to expect a slow recovery, drastically cutting its full-year revenue growth forecast.
Can I buy a house with Bitcoin? ›
If you're a cryptocurrency investor riding the current wild wave of the bitcoin rally, then the thought has probably crossed your mind: Can I buy a house with crypto? The short answer is yes—and we've got the home listings taking bitcoin offers to prove it.
Who uses Bitcoin the most? ›
20 Countries that Use Crypto and Bitcoin the Most
- China. Total Population as of 2022: 1.41 Billion. ...
- Germany. Total Population as of 2022: 84.08 Million. ...
- Indonesia. Total Population as of 2022: 0.28 Billion. ...
- United Kingdom. Total Population as of 2022: 66.97 Million. ...
- Kenya. ...
- Nepal. ...
- Colombia. ...
- Morocco.
Safety and security
Keeping your money in a bank or financial institution may reduce the risk of lost or stolen cash. They have strong, audited security measures in place. But printed cash can be counterfeited. Cryptocurrencies can be stored two ways: self-custody or third-party custody.
Is Starbucks financially successful? ›
Starbucks on Tuesday reported weaker-than-expected quarterly earnings and revenue, fueled by a surprise decline in same-store sales. The coffee chain also slashed its forecast for its fiscal 2024 earnings and revenue, predicting that its cafes would keep underperforming for several quarters.
Is Starbucks the most profitable coffee company? ›
Leading coffee shop chain sales in the U.S. 2022
In 2022, the leading coffee shop chain in the United States was Starbucks. The Seattle-based coffee chain topped the ranking with sales amounting to approximately 27.5 billion U.S. dollars. Dunkin' ranked second at 11.2 billion U.S. dollars.
Is a Starbucks franchise profitable? ›
If you were to open a Starbucks cafe, the potential rewards are high, but so is the amount of risk involved. According to reports from existing Starbucks franchise owners, profits can range anywhere between $50,000 – $200,000 annually, depending on how well it's managed.
Is Starbucks more profitable than McDonald's? ›
McDonald's profitability remains above 40% of sales, while Starbucks' comparable metric has dropped to around 14% of sales. McDonald's maintains its edge when it comes to cash flow.
