Dive Brief:
- Members of Starbucks Rewards and Marriott Bonvoy can now link their rewards accounts through Starbucks.com/MarriottBonvoy, the companies announced Tuesday.
- Participating loyalty members will “earn Double Stars on qualifying transactions at participating Starbucks locations through the duration of their eligible stay at hotels participating in Marriott Bonvoy,” the press release said. Meanwhile, members who make three Starbucks purchases during a designated Marriott Bonvoy week will get 100 points in the hotel brand’s loyalty program.
- Starbucks has been linking its popular, and strategically essential, loyalty program with the rewards programs of other major corporations since 2022, including Delta’s SkyMiles and Bank of America.
Dive Insight:
Linking its rewards to other programs with large memberships could help Starbucks drive more transactions. Such a boost is sorely needed for the company. Pricing increases and a consumer boycott movement related to the chain’s lawsuit — currently stayed pending negotiations — against Starbucks Workers United over a pro-Palestinian social media post from the union, have damaged the chain’s traffic in recent quarters.
In fiscal Q2 2024, Starbucks comparable sales in North America fell 3%, driven by receding traffic, according to the chain’s most recent earnings call. The decline in Q2 followed a traffic shortfall in fiscal Q1 2024.
More seriously, the chain’s per-store traffic has been weak for years, prompting significant changes to the physical layout of the chain’s stores.
The brand’s mobile order and pay features have a “mid-teens percent order incompletion rate,” driven by consumer frustration with item availability and order wait times, CEO Laxman Narasimhan said on the Q2 earnings call. This is particularly problematic for the chain as 60% of its morning orders come from rewards members, who overwhelmingly use its digital channels.
To promote its collaboration with Marriott, the hotel company will run a sweepstakes from June 18 to July 7. Customers can enter to win rewards points, visits to Starbucks’ Reserve Roasteries and a grand prize trip to each of Starbucks Reserve Roasteries in Seattle, Milan and Tokyo while staying at a participating hotel. Round-trip airfare is included in this prize.
Starbucks, for its part, will serve special cocktails at its Chicago, Seattle and New York Roasteries featuring a mixture of cold brew coffee and Italian spirits.
Starbucks Rewards, Narasimhan said, had about 33 million members in the United States as of the end of April.
On Marriott’s most recent earnings call, the hotel brand disclosed it had more than 203 million Marriott Bonvoy members globally, though it did not say what percentage of those members were located in the U.S. Regardless, the wide scale of Marriott’s program could help Starbucks start to dig its way out of its traffic hole.
