Starbucks Adds Grocery Channel to Starbucks Rewards – Will It Brew Loyalty?

Today’s Wall Street Journal reports that Starbucks is planning to use its coffee shops as a testing ground to get more products into grocery stores.

Chief Executive Howard Schultz said the chain is planning to drive its coffee-shop customers to supermarkets and to bring supermarket shoppers into the coffee shops through its Starbucks rewards program.

“We will reward customers who buy Starbucks products in the grocery store with opportunities to get rewards in our stores and vice versa,” Mr. Schultz said. “That’s a sea change in our ability to integrate these two channels of distribution.”

The My Starbucks Reward program is free and rewards holders of any registered Starbucks prepaid card with a variety of perks including free drinks, free refills and free beverage customization. The program has two levels: Green (after you earn 5 stars) and Gold (after you earn 30 stars).

Finding new ways to grow is critical for Starbucks, which struggled in recent years after a strategy of growing by rapidly opening new stores had run its course. When the economy turned sour and many consumers could no longer afford pricey coffee drinks, Starbucks closed hundreds of stores, cut costs and focused on improving store efficiencies.

Expanding My Starbucks Rewards to drive cross-shopping behavior by including Starbucks grocery products such as whole bean coffees, Via instant coffee, and ice cream will be a win for consumers, grocers and for Starbucks.