Blockchain, Bitcoin Ushering in a New Age in Retail Spending

Blockchain, Bitcoin Ushering in a New Age in Retail Spending

Blockchain, Bitcoin Ushering in a New Age in Retail Spending

$BTCUSD, $SBUX, $AMZN

Starbucks (NASDAQ:SBUX) Chairman Howard Schultz has said in the past that retail was going to witness “a seismic change” in consumer behavior because of technology, most notably the Amazon (NASDAQ:AMZN) effect and the explosion of e-Commerce.

“I think if you look at the history of our public life, one of the I think real benefits of what we’ve been able to accomplish as a company has been the entrepreneurial DNA of Starbucks and constantly having the curiosity to see around corners and make big bets,” COB Schultz said on the company’s FY Q-1 earnings call with investors Thursday.

He added that there’s “probably no better example” in recent years than what the coffee company has done with digital mobile payment in its brick-and-mortar stores.

Mr. Schultz sees another change on the horizon linked to the rise of cryptocurrencies and the underlying blockchain technology.

“I believe that we are heading into a new age, in which blockchain technology is going to provide a significant level of a digital currency that is going to have a consumer application. And I believe that Starbucks is in a unique position to take advantage of that,” he said. “Now, I do not want anyone to hang up on this call and assume that we have this all figured out because we do not. Or that we’re making a significant investment in this, because we’re not.”

Mr. Schultz drew a comparison to the rise of the Internet in the late 1990’s and the subsequent impact on businesses.

“We all can probably remember 20 years ago or so when someone tapped us on the shoulder and asked us, ‘Do you know anything about this thing called the Internet?’ And we probably all can remember that moment,” he said. “Well, 20 years later or so, the world has been completely transformed.”

The Big Q: What could happen to retail with cryptocurrencies?

“I mention this is not because I’m talking about bitcoin (BTCUSD) because I do not believe that Bitcoin is going to be a currency today or in the future,” he said. “I’m talking about the new technology of blockchain and the possibility of what could happen, not in the near-term, but in a few years from now with a consumer application in which there’s trust and legitimacy with regard to a digital currency.”

Looking at what the future of consumer behavior might look like, Mr. Schultz said that he believes there will be “1 or a few legitimate trusted digital currencies off of the blockchain technology.”

“And that legitimacy and trust in terms of its consumer application will have to be legitimatized by a brand and a brick and mortar environment, where the consumer has trust and confidence in the company that is providing the transaction,” Mr. Schultz added.

With hundreds of millions of dollars invested in this technology, there will likely be a major take no prisoners race.

“There’s going to be some winners, a lot of losers,” he said. “But we are in a very unique position to take advantage of what other tech companies and the blockchain technology will provide in terms of the rails to potentially be in the mix of this and benefit financially, benefit in terms of consumer behavior and incrementality and significantly create long-term shareholder value.”

Mr. Schultz reiterated that he not not bringing this up because the company is launching a digital currency or investing in the space.

“We are actively demonstrating the level of entrepreneurial curiosity and DNA of our company to do the things that we’ve done in the past to ensure the fact that we are at the cutting edge of this technology, of this consumer application,” he said. “We think we have something to offer the companies that are chasing this because we are in a position to create the trusted legitimate place in which this could be accepted and possibly take advantage of the mobile payment digital platform that we have created.”

Symbol Last Trade Date Change Open High Low Volume
NASDAQ:SBUX 57.99 26 January 2018 -2.56 57.94 58.17 56.55 51,846,000
HeffX-LTN Analysis for SBUX: Overall Short Intermediate Long
Neutral (0.14) Neutral (0.07) Neutral (-0.10) Bullish (0.46)

Have a terrific weekend,

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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