Starbucks to Change Rewards, Focus on Merch to Make Money

Starbucks recently held its investor day, where it highlighted the success of its turnaround plan initiated in 2024. Despite missing first-quarter earnings estimates, the company saw growth in transactions for the first time in two years. This growth was attributed to both loyalty members and non-members, a significant milestone for the brand. Starbucks credited this increase to the popularity of seasonal and limited-edition products, such as the viral “bearista” cup from last holiday season, and an updated customer loyalty program.

The coffee giant plans to capitalize on customers’ enthusiasm for limited-edition and seasonal collectibles by offering more exclusive merchandise, nostalgic moments, and partnerships. Tressie Lieberman, Starbucks’ global chief brand officer, emphasized the importance of these elements in driving repeat business, especially after a 3% revenue drop before the current CEO, Brian Niccol, took charge.

One of the key changes Starbucks is implementing is a revamped Starbucks Rewards program, with three tiers – Green, Gold, and Reserve. The new program promises better rewards for its 35 million active U.S. loyalty members. However, the changes have received backlash from some users, particularly regarding caps on free drink rewards and access to exclusive merchandise for higher-tier members.

The new reward earnings framework has also sparked criticism, with loyal customers expressing disappointment over slower accrual of rewards stars and potential price increases. Many took to social media platforms to voice their concerns, with some customers even calculating the devaluation of the new program.

For Starbucks enthusiasts, these changes may come as a surprise, highlighting the evolving landscape of loyalty programs in the competitive coffee industry. As the brand continues to innovate and adapt to consumer preferences, it remains to be seen how these changes will impact customer loyalty and engagement moving forward.

In conclusion, Starbucks’ focus on limited-edition products, revamped loyalty program, and strategic partnerships signals a new chapter in the brand’s evolution. As it navigates the challenges of a changing market, Starbucks remains committed to delivering a unique and rewarding experience for its customers.