News Column

Starbucks Seeks Loyalty at Grocery Store, Too

March 24, 2013
starbucks, loyalty, extends, grocery store

Starbucks has concocted a new way to coax you to buy Starbucks products even when you're not in a Starbucks store: free stuff.

In what's believed to be a retail first, the world's biggest coffee chain is extending its loyalty card program to the grocery store. The move comes at a time the multibillion-dollar loyalty card business booms globally as cash-strapped consumers base their purchases less on brand familiarity and more on the financial incentives that their favorite brands give them.

Beginning in May, if you buy a bag of specially marked Starbucks whole-bean or ground coffee at the grocery store, drugstore or club store, you can still rack up Starbucks Rewards card points that can ultimately earn you a free cup o' joe or latte or muffin at a Starbucks retail store.

By fall, the chain hopes to expand the program to other Starbucks grocery products.

"Over the past two years, we've been witness to a seismic change in consumer behavior due to technology," said CEO Howard Schultz, at the company's annual shareholder meeting. "As a result of that, we've been able to do things almost no other consumer brand has done before."

Like giving loyalty points for Starbucks brand products purchased outside Starbucks stores.

"You're not ashamed if your Starbucks loyalty club card falls out of your wallet," says Kate Newlin, a brand consultant and author of Passion Brands. "It not only has badge value, but you get something tangible for it."

Even then, technology doesn't make the grocery loyalty-points program entirely simple. It's not a one-step process. After making the grocery-store purchase of the Starbucks coffee, folks will still have to go online and enter a special code from the coffee bag to earn the points.

Starbucks loyalty customers can earn one "star" for purchasing the coffee at the grocery store. It takes 12 stars to earn a free food or beverage item at a Starbucks retail store.

For Starbucks, Newlin says, it's a compelling way to keep customers loyal. Starbucks clearly has research, she says, that shows that its customers must be considerably less loyal about buying bags of Starbucks brand coffee when they're at a grocery store -- and not at a Starbucks store. But with this one move, she says, Starbucks is luring folks to remain loyal "even when they're not at Starbucks."





Source: Copyright USA TODAY 2013