Coffee giant Starbucks (SBUX) recently made a move to change its rewards program in a bid to try and get more customers in the door. This in turn fed into Starbucks’ move to restore its “third place” status, where it used improved furniture and similar things to keep those customers in the fold. New reports suggest the rewards program changes may be working. Starbucks investors seem happy as well, and gave Starbucks stock a fractional boost in Thursday afternoon’s trading.
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Starbucks shook up the rewards program last month, returning some old programs and reducing the amount of points received for money spent from a Starbucks gift card. Given that the loyalty program actually factored into transactions that represented about 60% of the company’s revenue, changes here could have far-reaching effects.
As it turns out, the changes are starting to take hold, and in a positive way. Over a quarter of redemptions now take advantage of the 60-star option to get a $2 discount on any order. The “Free Mod Monday” promotion better than doubled point redemptions as compared to Mondays before the changes kicked in. Reserve tier users went with a free espresso shot, while green and gold tier members took vanilla sweet cream cold foam.
Scheduled Ordering
One of the biggest losses connected to the changes at Starbucks was the loss of many mobile order-only outlets. This move was regarded as a great way to lose a lot of business at a time when Starbucks needed cash to conduct all the store improvements it planned to make. It may have realized that much, because starting May 11, Starbucks will allow you to schedule a pickup order in advance.
Now, you will be able to schedule your order for pickup up to an hour in advance, reports note, by simply selecting a pickup time. This works particularly well for customers who have a meeting or the like planned, and need drinks ready for a specific time. The scheduling system does run in five-minute increments, so just because you schedule your order for 9:00, it may not actually be ready until 9:05.
Is Starbucks Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 14 Buys, 12 Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 18.67% rally in its share price over the past year, the average SBUX price target of $102.96 per share implies 2.83% upside potential.
