But losses mount for the home furnishings e-retailer that went public in October.
Starbucks revamps and expands its digital gift card program.
Coffee drinkers can now buy their friends a Starbucks venti latte online, thanks to the coffee purveyor’s new digital gift cards. Consumers can buy the company’s eGift cards at Starbucks.com and use them at StarbucksStore.com and at retail locations.
Starbucks started selling the eGift cards online Jan. 26. The eGift card program replaces a digital gift card program the company created in-house and launched last year that allowed only Starbucks’ Facebook fans to send each other digital gift cards.
The new program, which uses services from digital gift card vendor CashStar, allows anyone to send an eGift card to someone’s e-mail address or Facebook account.
The new eGift card program eliminates several obstacles that limited the previous program, says Ryan Records, director of Starbucks Card. With the prior program, both the eGift card sender and recipient not only had to be fans of Starbucks on Facebook, but had to download an eGift card application and registered their existing Starbucks cards on Facebook. “The size of the pie got smaller because of the obstacles we put in the way,” he says. “Now it completely opens it up. You can send anybody a gift card for $5 to $100 so long as you know their e-mail address.”
Records declines to reveal how many digital gift cards the company expects to sell, but says early indications suggest the digital option is tapping an unmet need. Even though the company has sold the new eGift cards for fewer than two weeks, Records says a sizeable portion of sales are taking place during hours when most Starbucks retail locations are closed, times when consumers can’t buy the traditional plastic gift cards. He says one in five transactions at Starbucks locations in 2010 were paid for using Starbucks cards, which amounted to $1.5 billion in sales.
Consumers can select from 10 gift card designs and add a personalized message when they send eGift cards to friends though e-mail or Facebook. Consumers can also schedule an eGift card to be sent at a later date. If consumers send cards to Facebook friends, they can also choose to publicize the gifts on their Facebook pages.
Records estimates that about a quarter of eGift card sales since launch originated on Facebook, even though consumers who click to send cards complete the transactions outside of the social network. Recipients can print out the eGift card notice, which includes a bar code that is scanned at the register, or add the eGift amount to an existing Starbucks account. They also can apply the amount to the recently launched Starbucks mobile app and use it to pay at stores.
Records says Starbucks will begin using online advertising to promote eGift cards as a Valentine’s Day gift option later this week. The company also has a section of its Facebook page dedicated to eGift cards and will soon send a promotional e-mail to members of its MyStarbucksRewards loyalty program.