It seems like a win win for Starbucks, and I think the ability to have that card on your iPhone just adds to the appeal of using this card so much more. I tend to shy away from these sort of cards just because I don't want them littering my wallet but I would be very happy to use them on my phone.
And as Stell2179 said , this will definitely appeal to younger consumers.
I think what it also does is capture the next generation of Starbucks consumers. Even if the phone is not their own, younger consumers will identify with that unique shopping experience. Also what an easy way to transition Starbucks into a true lifestyle brand and capture more consumer marketing information?
There's a message when I open the Starbucks Card app that says, "Use your Visa card for your 1st Starbucks Card reload of $25 and get $5 bonus, while supplies last."
Clearly, Visa's a partner rather than a competitor -- the "competition" as far as it goes is cash. The card association wins when people put their transactions (and information associated with the transaction) onto the card rather than use cash. They're looking for higher share of wallet for card transactions.
The merchant bank that acquires the card transactions also wins. Although there may be fewer small-ticket transactions, promotion of the concept of loading your e-purse will tend to grow their revenues as well.
As for end game -- I would only expect Starbucks to accept Starbucks Card payments at places where they control the atmosphere and branding. Right now that's coffee shops, but given their recent rebranding from "Starbucks Coffee" to "Starbucks," I'd expect a brand extension's in the works. Should Starbucks go on an acquisition spree and buy up the food court, let's say a frozen yogurt company and a premium ice cream maker, they could roll out card readers at the POS and drive traffic with targeted Starbucks Card offers.
A related example: If you have a GAP card you can also earn reward points at Old Navy and BR.
I'd guess they're more likely to partner with outside firms when it comes to rewards. For example, they could run a promotion that gives you free Rhapsody (retail value $10/mo) any month you spend $100 per month. Or iTunes songs, etc.
But I wouldn't expect a peer-to-peer payment model to emerge from this. No need to get your brand involved in the difficulties of managing that kind of commerce.
To your question about what's in it for the customer -- plenty, and I would venture to say that anyone who pays the cash price at Starbucks going forward is leaving money on the table.
I love how companies try to disguise their true aim of expanding the bottom line by giving you some choice that you may have had the least amount of interest in. In the case of starBUCKS ( aptly named), and their six dollar coffees.... Instead of trying to reduce the amount you actually pay for this over hyped service, they want to ring you into their world with technology to entice you to play games...
Games ? How about reducing the cost of the product? But as Ivan correctly points out, that is the least of starBUCKS concerns, they want to reduce the middle man ( the credit card company ) and in the meantime, you and I can play games and get something "free" in the end, for which we have already paid for many times over. Nice try starBUCKS, not everyone is an idiot.
Lots to think about here. Starbucks is big enough to promote "on us" transactions - one goal of most financial institutions; they make more money when they process transactions rather than let others do it. And you're right, they will begin to disenfranchise the credit card companies. What's in it for the customer? More flexibility for people who want to use www.points.com for sure, and more coffee mugs at a discount, or maybe something more substantial? Or will Starbucks emerge as the next PayPal? Are they interested? Question: What's the end game for a company which can do this?
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