A New Product For Starbucks? The White Label App
By Hannah Ash, contributing writer
Starbucks May License Mobile App For White Label Use By Other Companies
America’s favorite destination for gourmet coffee drinks and treats is looking to expand in a new direction — and it’s not the launch of a new consumable. CEO Howard Schultz recently announced that the global coffee and coffeehouse chain may move into licensing its mobile commerce app to help other retails take advantage of Starbucks’ well-designed app for their own enterprises. At the retailer’s most recent earnings call, Schultz reiterated this. As more and more sales are processed through mobile shopping and mobile apps, Starbucks could be positioning itself for a unique, and highly profitable, new expansion.
This move toward leveraging Starbucks’ considerable development resources could bring big payoffs for the retailer. Previously Schultz states, “all of us can see in our individual life that our phone is becoming our primary device for all kinds of things.” Starbucks is seeing a shift toward its customers using mobile devices for ordering and payment, with mobile payments comprising eleven percent of all of the retailers’ sales. Schultz comments that the move to potentially offer white label licensing of its mobile payment app is an organic one that grew out of demand, “most retailers don’t have the competencies, resources, and flexibility to make the investments. We are getting calls from retailers of all kinds. We have an amazing, stunning opportunity within mobile payment and social digital media. We are going to reinvent and create opportunity for new sources of revenue and ultimately profit that’s complementary to our business.”
Whenever there is a true demand for a product, the smart businesses responds even if that means expanding the business beyond its previously defined boundaries. Under Schultz’s guidance since 1987, Starbucks has continuously followed demand into new markets with new products and new approaches to the traditional coffee shop format. As demand for the retailers’ mobile commerce app continues, it makes sense for the coffee giant to expand into a new type of product offering, with Schultz stating, “we realized we’ve created something that’s highly viable that’s not only inside Starbucks, but also outside. Though the demand may exist, success for other retailers using the Starbucks mobile commerce platform is not necessarily a slam dunk. James Webster, research director of global payments for IDC Financial Insights, comments, “what makes Starbucks successful in selling coffee might not necessarily lend itself to white-labeling a mobile application and getting into payments.”