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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Starbucks Corporation | NASDAQ:SBUX | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-1.51 | -2.02% | 73.42 | 72.89 | 74.52 | 75.51 | 72.985 | 75.27 | 22,153,875 | 05:00:08 |
By Julie Jargon
Starbucks Corp. is teaming up with Spotify to allow subscribers of the music-streaming service to get reward points they can redeem at the coffee giant, in the first of what Starbucks Chief Executive Howard Schultz said will be similar tie-ups with other companies.
As part of the deal, Spotify is paying Starbucks for the right to issue Starbucks "stars" reward points to its subscribers, Starbucks said, without disclosing the amount. Spotify will use the stars as an incentive to attract new subscribers. Customers will also be able to link their Spotify and Starbucks accounts and suggest songs to include in the music playlists of the Starbucks stores they go to, the companies said.
The deal is part of Mr. Schultz's efforts to use digital initiatives to fuel growth at Starbucks. In January, he named a longtime technology-industry executive, Kevin Johnson, to be his second in command as president and chief operating officer.
Its stars points are central to that, with the potential to be not only a customer loyalty tool but a source of revenue from other companies willing to pay to use them to attract or retain their own customers.
"Our long-term plan has been to create an external ecosystem with like-minded brands that will buy Starbucks stars from us and use them as a catalyst in their own business," Mr. Schultz said in an interview, explaining that it will also drive more traffic into Starbucks stores as people come in to redeem the stars for free coffee.
Starbucks already has 10 million customers signed up for its loyalty program, and it hopes to gain more by pairing up with Spotify's base of 60 million customers, it said.
In addition to attracting customers into stores, where Starbucks hopes they might buy a pastry to go with the coffee they get by using stars, the Spotify partnership is intended to create a localized music experience.
Starbucks long has put music at the center of its coffee shop experience, by selling CDs and giving away free music downloads of songs piped into the stores.
Starting in the fall, the company's 150,000 U.S. baristas will receive a Spotify Premium subscription that will allow them to create music playlists for their stores. Using the Starbucks mobile app, customers will be able to indicate whether or not they like a certain song. The customer input will be calculated using a software algorithm and the baristas will act as DJs, updating the playlist according to customer preference.
Spotify CEO Daniel Ek said customers also will be able to access the coffee shops' playlists while they're away from the stores, turning each Starbucks its own music station.
Write to Julie Jargon at julie.jargon@wsj.com
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