Starbucks (SBUX) customers are accepting a lot more these days.
The coffee giant revamped its rewards program, as Modern Retail reported, implemented new store-service protocols, explored pop-culture partnerships, and attempted to make its cafes seem welcoming again.
Well, one incentive for customers is going away.
Starbucks is terminating a six-month test program called Coffee Loop, which offered chosen consumers a free hot brewed or iced coffee after buying nine.
The initiative began in October and will run until April 30, according to Modern Retail.
That gives participating consumers a short time to act. Anyone who earned awards should redeem them before the program goes dark.
Equally crucial is the greater message: Starbucks is not killing Starbucks Rewards. It’s axing a little side application that was outside the main app.
That’s key, as CEO Brian Niccol seeks to streamline the company while driving customer traffic, loyalty, and confidence.
“On April 30, the program will end and your Loop will be closed,” Starbucks told Coffee Loop members in an email cited by Modern Retail.
Starbucks ends Coffee Loop, not Starbucks Rewards
The stoppage might lead to confusion among users who see the word “rewards” and believe the bigger program is changing.
That’s not the case.
Starbucks is shutting down Coffee Loop, a limited pilot that ran on a separate website. The company’s fundamental Starbucks Rewards program remains intact.
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The Coffee Loop was based on a digital punch card: Buy nine qualifying beverages, get one free.
But the offer was not as broad as it seemed.
The complimentary drink does not include Cold Brew, Nitro Cold Brew, refills, prize drinks, promotional beverages, or partner mark-out drinks.
For some customers, Coffee Loop was beneficial; for others, it was not.
Because it ran on a separate site, the program was likely simpler for Starbucks to cut. The closure of Coffee Loop won’t affect the larger loyalty system, since it was never integrated into the main Starbucks app.
The transition is straightforward for consumers but time-sensitive: Log in to your Coffee Loop account and spend any brewed-coffee points you’ve earned by April 30.
Starbucks loyalty stakes keep rising
Starbucks isn’t backing away from loyalty. It is tightening up the system.
This makes the Coffee Loop closure more significant than it seems at first.
Starbucks completely revamped its Starbucks Rewards program in March, introducing three tiers: Green, Gold, and Reserve. It also offers advantages such as up to $2 off anything and Free Mod Mondays for drink personalization.
Related: Starbucks rival challenges coffee giant’s dominance
Those modifications indicate where Starbucks wants consumers to concentrate their attention: inside the core loyalty ecosystem.
Coffee Loop was outside of that system.
It may have been less attractive to a corporation attempting to streamline processes, speed up service, and make consumer behavior simpler to monitor.
The essential question for investors is not whether one free-coffee pilot survives.
The question is: Can Starbucks use loyalty to help promote more frequent visits without adding complexity that slows the company down?
This is the stress on Niccol’s turnaround.
Photo by NurPhoto on Getty Images
Starbucks makes a quiet but telling cut
The choice of The Coffee Loop is part of the larger Back to Starbucks initiative.
Niccol is working to reestablish the chain’s identity following a rough spell for the company. That means better service, more pleasant shops, and more reasons for consumers to come in more frequently.
But a turnaround is not merely a matter of fresh ideas. It also means eliminating those that are not obviously moving the firm ahead.
Coffee Loop may have rewarded certain consumers, but it also established a different loyalty route with a restricted benefit.
That could have been enough to kill the test at a time when Starbucks is striving to streamline the experience.
While the message for consumers is to use their Coffee Loop points by April 30, the messaging is larger for Starbucks.
Niccol is eager to reduce benefits that are not part of the company’s bigger revival strategy, even if they are popular with certain loyal consumers.
Key takeaways on Starbucks Coffee Loop
- Starbucks is ending Coffee Loop on April 30.
- Starbucks Rewards is not ending.
- Coffee Loop gave select users a free brewed coffee after nine purchases.
- Cold Brew and Nitro Cold Brew did not qualify.
- Customers should redeem earned Coffee Loop rewards before the shutdown.
- The move signals Starbucks is tightening its turnaround strategy.
Related: Starbucks CEO sends blunt message on discounts