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April 26, 2019
Starbucks CEO Kevin Johnson is confident that his growth strategy is working, and that includes his plans for the U.S. as well as China, where the company is expanding its mobile and delivery plans amid competition from rival coffee shop start-up, Luckin
Although it already offers Starbucks Delivers, under a partnership with Alibaba, in more than 2,100 stores across 35 cities, it will be in 3,000 stores by the end of fiscal 2019.
"Our team in China accomplished this in only four months, again demonstrating our operational agility," Johnson said in a conference call with securities analysts. "While still in the launch phase, performance to date is meeting our expectations with average delivery time under 20 minutes, higher average ticket and strong trial from existing Starbucks Rewards members."
Starbucks Rewards, which also launched four months ago in China, boasts 8.3 million members. The chain will build on that momentum to offer mobile order and pay to China by the end of fiscal 2019.
"The strength and relevance of the brand, expansion and performance of our new stores, accelerating comp growth in existing stores, positive progress on Starbucks Delivers, and a phenomenal customer reception to the Starbucks Rewards program are all signs that we are well-positioned for long-term growth in China," Johnson said.
Luckin already has 2,300 units across the country, its popularity didn't stop Starbucks China's comparable store sales from increasing 3% during Q2. Starbucks Corporation, which posted financials Thursday for its 13-week fiscal second quarter ending March 31, also reported that overall global comparable store sales were up 3% as well.
"Starbucks delivered another quarter of solid operating results, demonstrating that our 'Growth at Scale' agenda is working," Johnson said during the earnings call. "We are especially pleased with our comparable store sales growth in our two lead markets, the U.S. and China, where we are also continuing to drive strong new store development with industry-leading returns. With solid first-half financial results, we are on track to deliver on our full-year commitments."
Q2 Fiscal 2019 highlights
Global comparable store sales increased 3%, driven by a 3% increase in average ticket.Americas and U.S. comparable store sales increased 4%, driven by a 4% increase in average ticket.China/Asia Pacific comparable store sales increased 2%, driven by a 2% increase in average ticket; China comparable store sales increased 3%, with comparable transactions down 1%.The company opened 319 stores in Q2, yielding 30,184 stores at the end of the quarter, a 7% increase over the prior year.Consolidated net revenues of $6.3 billion grew 5% over the prior year.Consolidated net revenues grew 9% over the prior year adjusted for approximately 3% of net reduction from streamline-driven activities and a 1% headwind from unfavorable foreign currency translation. The company returned $3.2 billion to shareholders through a combination of share repurchases and dividends. Starbucks Rewards loyalty program grew to 16.8 million active members in the U.S., up 13% year-over-yearWhat's up in China?
A key growth area for Starbucks is China, where steep discounting from competition and the chain's aggressive pace of store development must be taken into account, Johnson said. The chain opened 553 stores the last 12 months, representing a 17% annual growth rate. The ultimate goal, however, is to open 600 stores annually to hit 6,000 stores by 2022.
"While the growth in long-term opportunity of China's specialty coffee category will continue to attract many competitors, our leadership position is underpinned by our brand strength and operating results, which are the key points of competitive advantage in China," he said.
Luckin, valued at nearly $3 billion, in one of those competitors as it plans to double its 2,300 locations by the end of this year and revealed this week that it was planning to take the company public in the United States.
Johnson isn't worried, however, saying that the brand will win in China for three reasons:
The premium quality of its beverages.The third-place experience it creates in each store.The emotional connection that employees have with customers."Each of these points of differentiation is reflected in customer feedback from a recent brand equity survey that we performed annually, which reaffirmed that Starbucks continues to lead across key consumer metrics in the specialty coffee category and is the customers' first choice for away from home coffee," Johnson said.
Topics: Loyalty Programs, Mobile Apps, Mobile Payments, Region: APAC, Restaurants
Companies: Starbucks
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Mobile Payments Today Podcast
April 26, 2019 | by David Jones
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Podcast Summary
David Jones talks to SunTrust CTO Ken Meyer about the role of traditional banks in the global economy.
Topics: Mobile Banking, Mobile Payments, Podcasts, Trends / Statistics
David Jones
David Jones is a veteran business and technology journalist, with three decades of experience writing about business travel, real estate and technology.
Since 2015 he covered a range of technology stories for the ECT News Network, which includes the E-Commerce Times, TechNewsWorld, LinuxInsider and CRM Buyer, writing about cybersecurity, artificial intelligence, machine learning, open source computing and privacy issues among others,. He recently covered FinTech issues for PYMNTS.com.
He worked as a staff writer for Bloomberg Business News and an online reporter for Crain’s New York Business. He has written for numerous media organizations, including Reuters, The New York Times, The Real Deal, Continental, City Limits and The Nation.
He was previously awarded the George Washington Williams Fellowship for Journalists of Color by the Independent Press Association.
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April 26, 2019
Sinemia Inc., an app-based monthly movie theater subscription service, announced that it would shut down immediately in the U.S.
The company was another competitor of MoviePass, which set off a revolution in Hollywood by offering a mobile app-based subscription that allowed film buffs to see unlimited releases for a low price. MoviePass relaunched its unlimited service last month after undergoing millions of dollars in losses last year as customers abused the service and attended movies repeatedly, well beyond the profit model.
Sinemia cited legal expenses and the inability to raise enough funds to continue operations, in the letter. Sinemia offered customers the ability to attend first-run movies for a monthly subscription price, with no blackout dates, at any theater and no monthly limits.
"We are all witnessing that the future of movie going is evolving through movie ticket subscriptions," the company wrote in a letter on its website. "However we didn’t see a path to sustainability as an independent movie ticket subscription service in the face of competition from movie theaters as they build their own subscriptions."
The company said the ability to cross-sell and inherent cost advantages of movie theaters have made this business difficult to compete in.
Prior to launching its unlimited service in the U.S., Sinemia operated leading subscription programs in the U.K., Turkey, Canada and Australia. At the time of the U.S. launch the company was getting 3 million global unique monthly visitors on its web and app platforms.
Topics: In-App Payments, Mobile Apps, Mobile Payments
Companies: MoviePass
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April 25, 2019
Sweetgreen, feeling the growing backlash against cashless retail that led to a movement to ban the practice in several cities and states, said it will begin accepting cash at all of its restaurants by the end of the year. The restaurant, which launched in 2007, operates more than 90 healthy, sustainable restaurants across the country, including in New York, Washington D.C., San Francisco, Boston and other major cities. The company originally announced plans to go cashless in December 2016, noting that when it had opened in 2007, about 40 percent of its business was cash, but that number had fallen to about 10 percent of companywide transactions by 2016.
Sweetgreen announced a reversal of the orignial policy, however, this week in a Medium post, and a spokesperson confirmed that it would initially begin accepting cash at its six Philadelphia locations starting July 1. The city banned the all-cashless retail practice more than a month ago.
"Ultimately we have realized that while being cashless has its advantages, today it is not the right solution to fulfill our mission," the company said in the Medium post. "To accomplish our mission, everyone in the community needs to have access to real food."
A leading fintech analyst said that while the policy will increase costs for the restaurant chain, the policy change is a recognition that cash is not going away.
"One of the truths of the payment space is that no form of payment has ever gone away, and clearly cash isn't going away anytime soon," Thad Peterson, senior analyst at Aite Group, told Mobile Payments Today via email. "It's good business to be able to transact with an individual who wishes to pay and accepting cash reinforces that position.
He said he will need a few additional datapoints to determine whether this reversal becomes an industrywide trend.
Topics: Contactless / NFC, Mobile Apps, Mobile Payments, Regulatory Issues, Restaurants, Retail
Companies: Sweetgreen, Amazon
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April 25, 2019
Stripe announced the launch of Stripe Billing, which offers a simplified process for SaaS and subscription-based businesses to manage regularly recurring payments, which are used in companies like Slack and Meetup in the U.S.
Stripe Billing will give Euroepean businesses of all sizes the ability to implement enterprise-level subscription payments quickly and at scale. The system uses Stripe's machine learning technology to help businesses quickly boost revenue and reduce engineering efforts.
The machine learning technology allows businesses to figure out the best time to reprocess failed credit cards, which helped boost lost revenue by 7% in the U.S. when the smart billing technology was added.
Stripe officials noted that subscription-based e-commerce has grown more than 100% in the past five years and 32% of consumers say they would rather buy goods using a subscription instead of a one-off purchase.
"Subscription and SaaS companies have been some of the internet’s greatest success stories up to now, but we’ve barely scratched the surface of what’s possible, especially here in Europe," Tara Seshan, product manager for Stripe Billing, said in the press release. "With Stripe Billing, companies of all sizes now have access to advanced invoicing tools that will help them comply with SCA (Strong Consumer Authentication) and VAT requirements."
The SCA requirements, starting Sept. 14th in Europe, will mandate the use of a second identification method, such as a password, fingerprint or phone number, for 300 million consumers.
Companies such as Typeform have already begun using Stripe Billing as part of a pilot testing period. However the service is now generally available for companies across Europe.
Topics: Mobile Apps, Mobile Payments, Online Purchasing, Region: EMEA
Companies: Stripe
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