How Starbucks Rewards Members Have Helped Keep Sales Up
When Starbucks first announced a spectacular showing for the second financial quarter, a lot of attention was paid to the role played by cold drinks. CNBC reported that despite inflation raising the cost of both gas and general groceries, Starbucks saw a 9% increase in net sales, reaching $8.15 billion. The coverage highlighted how the company credited these numbers to drinks like the iced shaken espresso, noting that cold drinks in general made up 75% of sales.
This is continuing a pre-established trend. In 2019, LaptrinhX covered how iced coffees have become the go-to way to consume coffee. "I think iced coffee is just sweeter even though it's the same thing but cold," one person explained. This is especially true when it comes to Starbucks appreciation. Repeated preferences have been for less strong coffee that is more flavorful than that of its warmer counterpart (via Spoon University). However, this focus on what people have been ordering has ignored the second prong of Starbucks's recent success.
In addition to selling lots of cold drinks, Starbucks has been consistently selling them to a certain group of individuals.
Starbucks members are hooked on the coffee chain's offerings
The growth in sales was largely spurred by people who were Starbucks members. Restaurant Dive noted that customer counts hit record highs in the quarter. However, Rachel Ruggeri, Starbucks EVP and CFO, explained that rewards customers increased by a larger amount than customers who weren't members.
Restaurant Business offers more concrete numbers. The second quarter saw Starbucks membership numbers grow by 13% from last year, reaching 27.4 million members. These members accounted for 53% of sales. Moreover, these customers are the ones that take full advantage of Starbucks's offerings, paying more for premium and customizable products.
This membership will receive special attention as Starbucks upgrades its program with its web3 initiative. TechCrunch relates that the coffee franchise will start to integrate NFTs to engage its customers. Interim CEO Howard Schultz outlined a future in which Starbucks becomes a digital third place that will integrate "our digital Starbucks Rewards ecosystem with Starbucks-branded digital collectibles as both a reward and a community building element."
Starbucks has a lot to be optimistic about.