Matt Ryanexecutive vice president, global chief strategy officer

Gerri Martin-Flickingerchief technology officer

Drivers of growth

PARTNERSSTORE

PORTFOLIOSDIGITALPRODUCTS

Components of Starbucks Digital Flywheel

RewardsThe most compelling rewards program with

everyday relevance

OrderingThe fastest, and most

convenient way to order

PersonalizationOffers, communications and service tailored to individual customers

PaymentThe easiest, most sensible ways to pay at Starbucks

and beyond

STARBUCKSDIGITAL

FLYWHEEL

Growth of the Starbucks Digital Flywheel

0%

10%

20%

30%

40%

FY13 FY16

5M

12M

Q1 FY13 Q4 FY16

MOBILE ORDER & PAY

NON-MOBILE ORDER & PAY MOBILE PAYMENT

PHYSICAL CARD STARBUCKS REWARDS SPEND

NON-STARBUCKS REWARDS CARD SPEND

% OF U.S. COMPANY OPERATED SALES # OF ACTIVE U.S. STARBUCKS REWARDS MEMBERS

Opportunity for much more growth via digital

DIGITAL FLYWHEEL U.S. CUSTOMERSPAST 30 DAYS, AS OF OCTOBER 2016

STARBUCKS REWARDS ACTIVE MEMBERS

ALL CUSTOMERS

MOBILE PAYING MEMBERS

MOBILE ORDER & PAY MEMBERS

TOTAL ADDRESSABLE AWAY FROM HOME

COFFEE/TEA MARKET

2.5M 1/3 MOBILE PAYING CUSTOMERS

8M 2/3 MOBILE PAYING CUSTOMERS

12M 1/6 ALL CUSTOMERS

75M

CU

RR

EN

T C

UST

OM

ER

S

~150M

Incrementality by customer type

FY13 FY16

LOWER-SPENDMEMBERS

MEDIUM-SPEND

HIGH-SPEND

NUMBER OF ACTIVE U.S. MEMBERS BY SPEND LEVEL (%)

LOWER-SPENDMEMBERS

MEDIUM-SPEND

HIGH-SPEND

100%

>20%

>30%

>70%

SPEND LIFT AFTER JOINING REWARDS

Source: 2016 Argus Credit / Debit card analysis

Opportunity in increasing awareness

Focus on driving acquisition and activation

Making sign-up available in store

Real-time actions to drive adding balance and first transaction

~60% In-storeREGISTRATION

Dynamic & actionable

CURRENT AWARENESS

40%OPPORTUNITY

ON-BOARDING

Benefits of a spend based program

CustomersFairer based on spend

Rewards for bigger purchases

StarbucksEncourages transaction AND ticket

Enables “Stars Everywhere” partnerships

Creates greater marketing flexibility

Stopped transaction splitting

A successful and complete program transition

94%

~7MMINUTES REDIRECTED

Retention rate even stronger than before

Program resulted in order consolidation, converting two points

of transaction comp to ticket

Spend remained consistent even within “low ticket” cohort

Stars can be adjusted into personalized incentives

Spend-based rewards can enable star-earning events

Star earnings

Today only,redeem your rewards for

100 stars only

We will create multiple tiers of redemption

Redemption levels can be personalized to incentivize

desired behavior

Star redemption

Stars can be leveraged by partners to create “Stars Everywhere”

earning opportunities

Stars can now be earned on additional CPG items

Stars beyond retail

Accelerating feature velocity following Rewards launch

June, 2016 October, 2016 Late 2016January, 2016

Favorite items and stores1:1 Real-time personalized offers

Real-time Personalization EngineHyper-personalized email400,000 variants/week

2-week lag spreadsheet drivenHandcrafted email, 30 variants/week

1:1 Personalized suggested selling and recommendations

x400,000x30

LAU

NC

H O

F SP

EN

D-B

ASE

D R

EW

AR

DS

Each customer’s digital experience is personalized “just for them”.

Sofia Jonathan Kira

Each customer’s digital experience is personalized “just for them”

Real-time Personalization

Engine

Sofia

A frequent Starbucks Rewards member who loves using the app.

OBJECTIVE We’d like to Surprise & Delight her with offers for new products.

Jonathan

A loyal Starbucks Rewards member and purchases afternoon iced coffee a few times a week through Mobile Order & Pay.

OBJECTIVEWe’d like him to try new drinks or add food to his order.

A Starbucks Rewards member, but only visits on occasion.

OBJECTIVEWe want to get her to come more frequently.

Kira

Personalized offers and experience

Always learning from our customer’s data

Real-time Personalization

Engine

Account Info

Purchase History

Customer Preferences

3rd Party Data

Starbucks App Usage

ContextualData

Weather/Daypart/Location

Anticipate customerbehavior

Drive transaction and ticket

We have only just begun to see the benefits of personalization

~3x

2xEMAIL REDEMPTION

3x+

improvement in campaign results run rate

app channel response high

incremental revenueper redeemer per year

All marketing becomes more targeted

Any screen becomes a personal screen

Starbucks gets even better at delivering personalized customer service in person

The future of personalization

Extending personalization capability to drive all customer engagement

1 2 3

Customer purchase/receive gift card

Customers register their gift card to join my Starbucks Rewards

Customer link the gift card into the app for mobile

convenience

Our payment business is foundational to Digital Flywheel ecosystem

A very large payment business 1 in 4transaction on mobile

1/3transaction cost of credit/debit

$6B / 38%of revenue on

pre-paid

1 in 6 U.S. ADULTS

receives Starbucks gift card during Holiday

Note: As of FY16

Value of Chase and Visa partnerships

10%annual savings in swipe fees

Chase Pay integrated across Starbucks channels:

Customer AcquisitionLoyalty Integration

Reduction in cost of payment Innovating new payment productsLeverage scale of partner to reach new customers

1 in 2household are Chase customers

~60% of global transaction on Visa

Unique, reloadable and rewarding general purpose

prepaid card

Accepted at

~70Mmerchants worldwide,

everywhere Visa is accepted

Growth of mobile ordering

U.S. COMPANY OPERATED ONLY

MOBILE ORDER & PAY AS % OF TRANSACTIONS

0%

1%

2%

3%

4%

5%

6%

7%

8%

485 1,4592,423

3,337 3,917

Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY16 Q1 FY17(QTD)

13 51201

6021,032

Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY16 Q1 FY17(QTD)

NUMBER OF STORES WITH MOBILE ORDER & PAY AT >10% OF PEAK TRAFFIC

NUMBER OF STORES WITH MOBILE ORDER & PAY AT >20% OF PEAK TRAFFIC

Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY16 Q1 FY17

Mobile ordering incrementalityand operational impact

MANY

~100MMINUTES REDIRECTED

>20

visits per customer

Frees up labor for more value-added activities

Higher overall transactions at high adoption stores during peak

POINTS5UP

TO

higher customer satisfaction scores

INCREASE

MORE

Near-term levers to grow Mobile Order & Pay

Current order conversion rate

30% higher

Improved user experience

FROM TO

23% LESSattach than average

transaction

MOREattach than average

transaction

Near-term levers to grow Mobile Order & Pay

Recommendation

FROM TO

~1,000STORES

with more than 20% peak transactions in Mobile Order & Pay

2,000+STORES

FROM TO

Near-term levers to grow Mobile Order & Pay

Operational improvement

Long-term growth drivers for Mobile Order & Pay

Mobile Order & Pay for all customers

Second serviceCurbside in the U.S.and delivery in China

ACCEPTS ALL CARDS

Elevate customer experience

with a seamless digital

experience

To extend globally, we will move into the cloud and unify experience

Unified localized experienceOwnership model agnostic

Mobile payment

Mobile Order & Pay

Rewards program

Personalization

Deliver holistic Digital Flywheel

Cloud-based

Ownership model agnostic

Global experience: Mobile Order

& Pay App

Global loyalty and personalization

Digital Flywheel expansion

Americas EMEA CAP

Unified Commerce

Platform

Licensed/Franchise Stores

Product, price, inventoryLocation hours etc.

Company Operated Stores

Product, price, inventoryLocation hours etc.

Unified StarbucksGlobal Loyalty

Customers and Personalized Engine

$

Cloud-based

Ownership model agnostic

Global experience: Mobile Order

& Pay App

Global loyalty and personalization

JapanFirst company operated market

GermanyFirst international licensed market

JapanFirst company operated market

Cloud-based

Ownership model agnostic

Global experience: Mobile Order

& Pay App

Global loyalty and personalization

GermanyFirst international licensed market

By the end of FY19 80% of worldwide stores will have access to the Digital Flywheel

Starbucks Digital Flywheel

RewardsThe most compelling rewards program with

everyday relevance

OrderingThe fastest, and most

convenient way to order

PersonalizationOffers, communications and service tailored to individual customers

PaymentThe easiest, most sensible ways to pay at Starbucks

and beyond

STARBUCKSDIGITAL

FLYWHEEL

Revenue contribution of Digital Flywheel

INCREMENTAL REVENUE CONTRIBUTION BY DIGITAL FLYWHEEL, GLOBALLY, FY17-FY21$ MILLIONS

FY16 FY21

>2xTHAN FY16