Starbucks adjusts its credit card system to encourage customers to buy more of its packaged food

Starbucks hopes to use consumption points to change consumers' habits

Starbucks recently updated its "Starbucks Card points" (Starbucks Rewards Program) system, which counts both freshly ground coffee in stores and packaged products (capsule coffee, roasted coffee beans and bottled coffee drinks, etc.) purchased in super retail channels.

Behind the adjustment of the points system, Starbucks may also want to take the opportunity to persuade consumers to spend more than freshly ground coffee, whether in stores or supermarket chains.

Starbucks Card points is Starbucks' membership points feedback service launched around the world. Consumers can get "stars" through consumption, and after accumulating a certain number of stars, they can get free coffee invitation coupons, buy one get one free coupons and other member benefits.

In the United States, you used to get a star for a single purchase (no matter how much), and 12 stars could be exchanged for a free coffee or food voucher. The system also allows consumers to accumulate stars by buying only the cheapest candy in the store instead of coffee with an average price of $3-as long as you spend 12 times and spend at least $20.

Starbucks increasingly thinks it's not a good deal. So since April last year, they have reformed the American points system: they get two stars for every dollar they spend, and 125 stars for membership benefits. In other words, consumers must spend more than $62.50 to get membership benefits.

Star Card Credit App

Consumers are less impressed, and Starbucks' social media popularity has fallen by almost 50 per cent in a week with the introduction of the new points system, according to BusinessInsider. People complain that Starbucks will shut out coffee lovers. "Starbucks should take a look at Dunkin' Donuts's conscientious membership system!" Someone wrote on Starbucks' Facebook page.

Starbucks' response is that you can buy coffee and an extra serving of bread, and now, by expanding the product range, customers can be encouraged to buy more packaged food in supermarkets, rather than just freshly ground coffee.

They are targeting big international food chains such as McDonald's. At an investor meeting in December, Starbucks said it planned to add 50% of its stores by 2021 and achieve 8% store expansion and 5% same-store sales growth by September. One of the driving forces for growth is to develop a more diversified product line of packaged food and beverages to meet the needs of different people.

Starbucks has long been planning a food business other than freshly ground coffee, including food in stores as well as food from other retail channels. After all, Starbucks is a beneficiary no matter which channel it sells.

Last year, Starbucks invested in Princi, an Italian bakery, and Princi is also reported to be the exclusive food supplier for coffee roasters and Zhenxuan, a high-end Starbucks store. In the Chinese market, Starbucks launched a program called "fresh Food" last year, launching 38 meals at prices ranging from 15 to 32 yuan.

Packaged foods include encapsulated coffee, roasted coffee beans and bottled coffee drinks such as Frappuccino, which are sold through stores and other retail supermarkets. In China, Starbucks partnered with Hong Shifu Holdings Limited (0322: HKEx) to sell Starbucks ready-to-drink drinks in 2015. Starbucks bottled Frappuccino drinks are now available in more than 6000 domestic Starbucks stores, supermarkets and convenience stores.

According to CNBC, 20% of Starbucks' sales come from food. Like coffee shops around the world, Starbucks needs to increase its income through food other than coffee, and it also needs different kinds of food to attract customers with different needs, whether in stores or retail channels. Starbucks' second-quarter results show that average consumer spending in the u.s. market rose 4%, but the number of purchases decreased by 2%. The adjustment of the points system may attract consumers to buy more.

Source: interface news

Author: Liu Yujing

FrontStreet Coffee is a long-established specialty coffee roaster in Guangzhou China, selling freshly roasted beans from its own farm in Yunnan as well as dozens of carefully selected single-origin beans from around the world for both pour-over and espresso. The products deliver consistently excellent quality and great value, with shipping within 24 hours. Guangzhou’s FrontStreet Coffee shop is recommended by many coffee lovers, and the beans are now available online at the Tmall 。

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