Starbucks Places Bet On Tech Services -- WSJ
23 July 2019 - 5:02PM
Dow Jones News
By Heather Haddon
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (July 23, 2019).
Starbucks Corp. said it is taking a stake in a digital
technology company to speed up its offering of mobile ordering and
payment options at its global stores to improve customer
convenience.
The Seattle-based coffee giant is making an investment and
securing a board seat in Brightloom, a company founded in 2015
under the earlier name eatsa, as it seeks to accelerate the
adoption of technology by its stores around the world.
In return, Brightloom will make available to Starbucks licensees
the coffee chain's system for mobile ordering and payment, loyalty
perks and delivery-order management. Brightloom and Starbucks will
also sell access to the platform to other restaurants trying to
quickly adopt their own digital programs, the companies said.
Both companies said Starbucks's stake was significant but
wouldn't disclose the specific financial terms. Franchisees abroad
were expected to be the first to sign up.
Starbucks -- the world's largest coffee chain by stores and
revenue, with more than 30,000 locations -- was one of the first
big restaurant chains to invest in a sophisticated loyalty program,
with nearly 17 million members currently. But adoption of its
digital offerings among store licensees has been less widespread.
Less than half of Starbucks markets around the world now have the
company's mobile app, and only eight have digital payments,
according to the company.
Digital ordering and delivery programs are becoming increasingly
vital to restaurants trying to draw more customers amid
intensifying competition.
"It went from something that was nice to have to being table
stakes," said Adam Brotman, Brightloom's chief executive and a
former Starbucks global retail and digital head, on Monday.
In addition to delivery, restaurants are also expanding mobile
payment to make purchasing easier and more appealing to younger
consumers. Mobile payment is still small in the U.S., but is firmly
established in Asia. Thirty-one percent of restaurants offer mobile
payment, according to a survey of U.S. restaurant operators by the
Toast Inc. food-service tech provider this year.
Big restaurant chains in particular are ramping up their tech
investments. McDonald's Corp. bought an Israeli digital startup
earlier this year to improve its drive-through ordering and
promotions. The burger chain is also experimenting with
voice-activated ordering at its drive-throughs.
Starbucks is facing increasing competition abroad from Luckin
Coffee Inc., a newly public Chinese company that specializes in
delivery and mobile ordering. Luckin said Monday that it had signed
a joint partnership to launch coffee shops in the Middle East and
India that will also employ its technology, which includes mobile
ordering, payment and delivery.
Write to Heather Haddon at heather.haddon@wsj.com
(END) Dow Jones Newswires
July 23, 2019 02:47 ET (06:47 GMT)
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