Starbucks is about to get even more digital.
The coffee giant announced a major executive shift yesterday: longtime CEO Howard Schultz has stepped down, and will turn his focus to “innovation, design and development of Starbucks Reserve Roasteries,” the company’s new upscale brand, as an executive chairman, the company said yesterday. Tech veteran and current COO Kevin Johnson will be assuming the CEO role effective April 3, 2017, according to the statement yesterday.
Starbucks is renowned for its tech-forward approach to retail, and the to-be CEO has already been credited for many of the company’s digital and mobile efforts. Serving as COO since March 2015, Johnson has led core support functions of Starbucks, including technology, mobile and digital platforms, according to the statement.
Prior to joining Starbucks, Johnson spent 16 years at Microsoft, eventually serving as the president of the platforms division. In 2008, he was appointed to the National Security Telecommunication Advisory Committee.
“Kevin has been a wise and supportive resource for me, personally, both during and following our company’s transformation,” Schultz said during the Investor and Media conference call yesterday. “For years he has provided invaluable insights into how we scale the company around the world, and how to best integrate industry-leading customer-facing technology into our customer experience and operations.”
And customers seem to have responded well: mobile payments represented 25% of total payments in the fourth quarter, up from 20% a year prior, the company announced during the earnings call last month. Starbucks Rewards membership has increased 18% year-over-year, with 20 million active Starbucks Rewards members. Mobile Order and Pay – a feature that allows people to swoop by you and pick up their coffee, while you are stuck in line waiting to pay – now represents 6% of all transactions, that’s in about a year since the launch.
“Given the seismic shifts in consumer retail behavior, we have seamlessly extended our brick-and-mortar experience to the digital world,” Johnson said during the call yesterday. “And we are now focused on a multi-year strategy to elevate the entire brand, extend our differentiation around the customer experience, and build on the strength of Starbucks as a destination.”