`PATENT OWNER
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`EXHIBIT 2060
`EXHIBIT 2060
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`http://www.pymnts.com/news/2014/starbucks-claims-90-percent-mobile-payments-market-share/
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`LOYALTY & REWARDS
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`Starbucks Claims 90 Percent Mobile
`Payments Market Share
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`By PYMNTS
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`Posted on October 31, 2014
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`Although Starbucks CEO Howard Schultz said his coffee company has
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`already found the recipe to capture a loyal base of mobile customers, he
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`said the launch of Starbucks’ mobile order and pay app in December will be
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`the single-most important technology innovation introduced by the
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`company this year.
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`Schultz reported during the company’s third-quarter earnings call on
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`Thursday (Oct. 30) that Starbucks is close to hitting an average of 7 million
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`mobile transactions a week. Due to its early entry to the market with its
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`mobile version of its payment card, Starbucks was able to capture 90
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`percent of mobile purchases made over mobile devices in 2013.
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`“While that figure has been growing almost 50 percent a year, the real
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`growth is yet to come,” Schultz said. “Starbucks Coffee has cracked the
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`code to trying mobile payment to loyalty.”
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`Schultz emphasized that Starbucks’ success has much to do with its ability
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`to leverage what he called “the intersection of three powerful mobile
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`trends.” Those trends he said consist of a shift in consumer behavior to
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`people spending less time in brick and mortar stores and more time online,
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`the long-term trend of people eating out of the home more and the growth
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`on online activity from mobile devices.
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`“Allowing consumers to conveniently conduct their lives and complete
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`commerce from wherever they have to be was actually occurring as a
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`cultural shift in time allocation away from retail experiences. Starbucks is
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`uniquely well positioned to benefit from this convergence as a destination
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`experience,” he said, and called Starbucks “an uncontested leader in
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`mobile.”
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`That uncontested model, he said will be exhibited by the launch of
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`Starbuck’s mobile order and pay app in December in the Portland market
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`that allows consumers to place an order ahead of time via Starbucks’
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`mobile app and pick up in the selected store without waiting in line.
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`“Starbucks mobile order and pay is a totally unique technology,” Shultz
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`said. “It seamlessly integrates mobile ordering and our proprietary mobile
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`program with point of sale and store operations that enables us to enhance
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`our customer experience, exceed our customers expectations and extend
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`customer loyalty. As you will see in a few weeks, no company offers any
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`technology remotely like Starbucks mobile order and pay.”
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`What also gives Starbucks an edge is having a growing number of cafes
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`that will continue to expand this year, which includes adding more drive-up
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`options to stores. Starbucks is also gearing up to launch its food and
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`beverage delivery services in select markets in the second half of 2015.
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`This also connects Starbucks’ model of merging its vision for the brick-and-
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`mortar side of its business with mobile and online ordering.
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`“That’s our version of E-commerce on steroids,” Schultz said. He pointed
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`out that this addition will also connect more consumers to its loyalty
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`program and mobile card payment options. Starbucks currently has 8
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`million active rewards members, which experienced a 28 percent growth
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`from last year’s third quarter. Starbucks’ combination of rewards programs,
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`mobile payment option and expanded in-store options has set it up to adapt
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`to consumer demand, Shultz said.
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`“Starbucks is the only local, national or global business of any kind to
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`succeed in crossing both the most difficult and the most critical case
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`in standing between mobile payment and transforming consumer behavior,”
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`he said. “I can assure you Starbucks will have a major role to play both
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`inside and outside our stores as the recent mobile payment industry
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`evolves. We are playing offense here. We understand that there is a macro
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`issue in the consumer shift. We are playing offense and we began that last
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`year right after the holidays and come this holiday come 2015 we are going
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`to be in a position to win.”
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`As for specific earnings figures for Starbucks, it produced another strong
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`quarter, bringing in a record $4.2 billion in net revenue, a 10 percent
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`increase, year over year. It also had a non-GAAP operating income of
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`$857.3 million, a 28 percent year over year growth. Overall, global
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`comparable store sales increase 5 percent, which was the 19th straight
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`quarter of comparable growth at that rate. Starbucks opened 503 new
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`stores in the quarter, ending the fiscal year 2013 with 21,366 stores in 65
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`countries. Starbucks also reported capital expenditures of approximately
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`$1.4 billion driven primarily by store investments, which include new stores,
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`mobile order and pay and the evenings program.
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