SBUX Starbucks Corporation

By Heather Haddon 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (July 23, 2019).

Starbucks Corp. said it is taking a stake in a digital technology company to speed up its offering of mobile ordering and payment options at its global stores to improve customer convenience.

The Seattle-based coffee giant is making an investment and securing a board seat in Brightloom, a company founded in 2015 under the earlier name eatsa, as it seeks to accelerate the adoption of technology by its stores around the world.

In return, Brightloom will make available to Starbucks licensees the coffee chain's system for mobile ordering and payment, loyalty perks and delivery-order management. Brightloom and Starbucks will also sell access to the platform to other restaurants trying to quickly adopt their own digital programs, the companies said.

Both companies said Starbucks's stake was significant but wouldn't disclose the specific financial terms. Franchisees abroad were expected to be the first to sign up.

Starbucks -- the world's largest coffee chain by stores and revenue, with more than 30,000 locations -- was one of the first big restaurant chains to invest in a sophisticated loyalty program, with nearly 17 million members currently. But adoption of its digital offerings among store licensees has been less widespread. Less than half of Starbucks markets around the world now have the company's mobile app, and only eight have digital payments, according to the company.

Digital ordering and delivery programs are becoming increasingly vital to restaurants trying to draw more customers amid intensifying competition.

"It went from something that was nice to have to being table stakes," said Adam Brotman, Brightloom's chief executive and a former Starbucks global retail and digital head, on Monday.

In addition to delivery, restaurants are also expanding mobile payment to make purchasing easier and more appealing to younger consumers. Mobile payment is still small in the U.S., but is firmly established in Asia. Thirty-one percent of restaurants offer mobile payment, according to a survey of U.S. restaurant operators by the Toast Inc. food-service tech provider this year.

Big restaurant chains in particular are ramping up their tech investments. McDonald's Corp. bought an Israeli digital startup earlier this year to improve its drive-through ordering and promotions. The burger chain is also experimenting with voice-activated ordering at its drive-throughs.

Starbucks is facing increasing competition abroad from Luckin Coffee Inc., a newly public Chinese company that specializes in delivery and mobile ordering. Luckin said Monday that it had signed a joint partnership to launch coffee shops in the Middle East and India that will also employ its technology, which includes mobile ordering, payment and delivery.

Write to Heather Haddon at heather.haddon@wsj.com

(END) Dow Jones Newswires

July 23, 2019 02:47 ET (06:47 GMT)

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