Starbucks Corp. now gets 21% of its U.S. sales in company-owned stores through its mobile app, and its new order-and-pay system looks to be just as popular.
"Our industry-leading mobile app has emerged as an evolving platform and profit driver of its own," Howard Schultz, the company's chairman and chief executive, said in an Oct. 29 conference call to discuss earnings for the company's fourth quarter and fiscal year, which ended Sept. 27.
Mobile Order and Pay was only in its testing phase the last time Starbucks reported earnings, but the company pushed hard to bring it nationwide ahead of the holiday season. Mobile Order and Pay is now "operating at a run rate of over five million transactions per month, and that figure, believe it or not, is growing by the hour," Schultz said.
The mobile ordering feature results in shorter lines and faster service, the company says.
This month, Starbucks also committed to accept Apple Pay in its U.S. stores. It also began adding drive-thru video screens to allow motorists to talk over a video connection with a barista as they order. It is also in the process of ending its processing relationship with Square, as Square disclosed in its IPO filing that transaction costs exceeded the money made by handling payments for the coffee chain. Starbucks has chosen to instead work with JPMorgan Chase, with mobile transactions still serviced by First Data.