Starbucks Infuses Gift Cards with Social Media

AN INTERVIEW WITH:
Ryan Records
Director of the Starbucks Card
Starbucks

Last year, customers loaded more than $1.5 billion onto Starbucks gift cards. As the coffee company increased its presence on social media, it also wanted to digitally expand the card program, which launched in 1991. Ryan Records, director of the Starbucks Card, spoke to eMarketer writer/analyst Kimberly Maul about the launch of the e-gift cards, how Starbucks is integrating them into social media and mobile strategies, and the surprises he’s seen since the e-gifting program began on January 26.

eMarketer: Tell me a little about the online e-gift card. Is this the first time customers can give Starbucks gift cards to friends through Facebook?

Ryan Records: We have a site called MyStarbucksIdea.com, which is an opportunity for customers to actually connect directly with the business folks and provide ideas and feedback. One of the things we kept hearing was that people want to send a drink digitally. So this was in direct response to that.

We had a Facebook app before, and that was a little difficult to navigate because the customer had to “like” Starbucks, and the recipient had to “like” Starbucks. Then the customer had to download the Starbucks app, and the recipient had to download the Starbucks app. And the customer had to have a registered card, and the recipient had to have a registered card. Then we could move money back and forth.

The difference now is if I have an email address, I can send anybody I want a gift, regardless of whether or not they have a Starbucks card. And if I don’t even have their email address, I can give them a gift on their Facebook wall. It’s more convenient. There’s nothing to restrict it now.

eMarketer: What have you learned so far?

Records: We’re seeing a lot of traffic on Facebook. We’re seeing a lot of posts. It was an eye-opener when these gifts are actually purchased. Literally, after the doors close in our store, this is when the e-gifting business picks up. Another lesson is how many folks want a last-minute gift, and want that convenience. We saw it, especially on Valentine’s Day, which you can imagine.

eMarketer: Are you advertising on Facebook for it?

Records: We’re not. We have some various paid channels and then we’re using our own digital assets to do that as well. We’re telling our tens of millions of Facebook fans and our registered cardholders that they have the capability to send e-gifts. We’re turning our own digital assets on.

eMarketer: What advice do you have for any cafe or restaurant owners and operators who are looking to do online and social e-gifting?

Records: My advice would be to really think hard if you want to do this internally, or if you want to do it externally. We partner with [digital gifting and incentives company] CashStar in this. We put a lot of thought into it, and I think we made the right decision.

The only other advice I would give is to not underestimate fraud mitigation. This is a new channel for a lot of people, and if not done correctly, it could open you up to a large amount of fraud. That’s where partners like CashStar come in, and really bring the level of sophistication and expertise that a program like this requires.

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