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Starbucks’ Mobile Order & Pay drives sales during peak hours

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January 25, 2016

Starbucks' Mobile Order & Pay takes off in Canada

Starbucks’ Mobile Order & Pay takes off in Canada

Growing adoption of Starbucks’ Mobile Order & Pay program is a boon for the chain during the morning rush, when use increases and accounts for about 10 percent of transactions.

During the retailer’s Q1 2016 earnings call, Starbucks noted that Mobile Order and Pay is seeing significant adoption rates, but is most popular in the morning at its peak hours for users attempting to avoid long lines. Currently, there are about 6 million transactions through the program occurring every month, which shows its significant potential.

“The data that Starbucks shared reinforces a key insight that Julie Ask from Forrester brought up at the Mobile Marketer Mobile First Look 2016 event,” said Michael Becker, managing partner at mCordis. “Julie pointed out that we live in a world driven my mobile moments.

“We touch our phones a couple hundred times a day and each of these touches is a mobile moment,” he said. “The data from Starbucks reinforces that people are increasingly turning to their mobile phones, their watches, to meet their payment demands at key moments throughout the day, in the morning in Starbucks’ case.

“For Starbucks, having people pay through mobile drives so many benefits. It can increase the traffic flow of the line, generate invaluable individual insight, increase people’s dependence on Starbucks as a place to store value for shopping and enhance and reinforce loyalty with the individuals it serves.”

Mobile earnings
The beverage retailer will continue rolling out additions to the Mobile Order and Pay program, with current pilot tests in the New York and Seattle markets for mobile delivery. Starbucks is working to personalize the experience for this and other mobile features as well, to create a following of highly loyal and returning customers.

Starbucks

Mobile rewards users are still growing in numbers for the retailer, with a 23 percent increase in the last year, and now exceeding 11.1 million users. Starbucks also saw more than one million users of Mobile Order and Pay this past December, who averaged about five orders per person that month as well.

Starbucks is hoping to create more engaged and brand-immersed customers, and recently updated its app to allow playlist viewability. Customers at a Starbucks location are now able to save songs they hear playing in the restaurant to a playlist within the app.

The mobile app uses GPS technology to determine which store the user is at, which will then share the music information for that particular location. Users can access their playlist through Spotify after leaving the store and continue listening to the saved music.

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The new addition is part of the retailer’s goal to provide a completely personalized, comprehensive experience for customers to keep them coming back.

Starbucks strategy
The chain retailer recently built on its faith in Mobile Order & Pay by expanding to Toronto and Vancouver, following successful adoptions in major markets in the United States as the concept gains wider acceptance in retail (see more).

Starbucks also maximized the number of users on its mobile payments app by extending its capabilities to include Visa Checkout, exhibiting the growth of Visa’s platform (see more).

“Starbucks is a bellwether company, it is showing the way for the rest of us,” Mr. Becker said. “Mobile payments will soon move beyond a nice-to-have in retail to a must, since people will begin to expect or only frequent those companies that empower them to pay through and with their mobile devices.”

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Brielle Jaekel is staff writer on Mobile Commerce Daily and Mobile Marketer, New York. Reach her at brielle@mobilemarketer.com.

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