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Starbucks accelerates Mobile Order & Pay rollout as success escalates

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September 14, 2015

Starbucks' mobile ordering will be available chainwide soon

Starbucks’ mobile ordering will be available chainwide soon

Starbucks is accelerating the rollout of Mobile Order & Pay in response to strong results, with the service now expected to be available at all company-owned stores by the end of September as well as on Android phones for the first time.

The coffee house chain’s chief financial officer Scott Maw made the announcement late last week during a presentation at the Goldman Sachs Global Retailing Conference. The service, which enables customers to place an order before arriving at store, is driving efficiencies and enabling each store to complete more transactions.

“What we’re seeing around Mobile Order & Pay is, we’re seeing incrementality broadly across all the store types and we’re seeing increased incrementality and increased overall metrics as we roll out different waves,” Mr. Maw said at the event. “So every wave is stronger than the one before and I think that’s due to the fact that we’re getting a little bit better operationally on how to execute this.”

Increased investment
At the event for investors, Mr. Maw explained that because the results from Mobile Order & Pay are so strong, Starbucks is increasing its investment in order to get it into more stores on an accelerate schedule.

Mobile Order & Pay was initially rolled out in Portland, OR, in December of 2014, with plans calling for bring the service to all stores by the end of 2015.

Based on the positive response in Portland, Starbucks then brought the service to Seattle and the rest of the Pacific Northwest. With even stronger metrics, the company decided at that point to try to get Mobile Order & Pay into all stores by the holidays.

starbucks-mobile-order-and-pay

In the middle of June, Starbucks introduced the service to 4,000 stores across the Sunbelt and Midwest. Once again, the results were stronger than the previous roll out, prompting the decision to once again move up the deadline, this time to the end of September.

The expansion of Mobile Order & Pay onto Android was also expected not to happen until the holiday period, but Starbucks has moved back this schedule as well, bringing the service to Android users by end of the month.

Customized menus
Starbucks has also been working on the ability to have customized menus available in Mobile Order & Pay based on what is available at the nearest store. This will also become available by the end of the month.

Mr. Maw reported that one reason why the result from Mobile Order & Pay keep getting stronger is that Starbucks is getting better with each subsequent rollout wave at handling the customer interaction at the point when an order is being picked up. Mobile Order & Pay is fully integrated into Starbucks’ technology platform, with orders going straight into the point-of-sale system and then through the same production mechanism as in-store orders.

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One of Mobile Order & Pay’s biggest successes for Starbucks is how it is removing some of the pinch points, thereby enabling some of the chain’s busiest stores to move more customers, thereby driving incrementality and significant more transactions.

This is also helping to improve customer satisfaction, with Starbucks measuring a significant uptick in customer satisfaction following the introduction of Mobile Order & Pay.

Suggested items
So far, the average ticket for Mobile Order & Pay is on par with in-store orders. However, Starbucks expects the Mobile Order & Pay ticket to increase as its adds the ability to provide suggested items next year.

Going forward, Starbucks expects Mobile Order & Pay to drive increased acquisition and retention for its My Starbucks Rewards program and lay the groundwork for delivery service.

“We’ve spent the money and taken the cost to do that because we know we have a winner and it’s running ahead of our expectations,” Mr. Maw said.

Final Take
Chantal Tode is senior editor on Mobile Commerce Daily, New York

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