Starbucks Japan’s partnership with local fashion brand Beams has produced an interesting entry into a precarious wearables market: a branded keychain that customers can use to pay for their drinks, similar to its ubiquitous mobile payments product.

The keychain is covered with a leather fob branded with the Starbucks logo, and is available in a variety of different colors. Starbucks has not announced any plans to expand the product outside of Japanese locations.

“At the end of the day success for all of these new payment technologies is driven by consumer adoption,” said Perry Kramer, vice president and practice lead at Boston Retail Partners. “Vendors can create great looking and functionally-rich technology; however, if it is not frictionless and does not add value it will fail in the market.

“I do see some variant of this evolving in the US market,” he said. “One of the challenges for retailers and vendors in the US is the need for education and training for a very large population of associates.

“The explosion of mobile wallets offering inconsistent user experiences over the last few years has made it difficult for retailers to continually train associates on what they accept and how to accept them. Until retail associates are fully educated and trained, we run the risk of a bad customer experience which will translate to slower adoption rates and potential failure.”

Branded keychain
The keychain, named Starbucks Touch the Drip, is currently available to Starbucks Japan customers for the equivalent of $35. The technology within the keychain is similar to that packaged inside prepaid Starbucks gift cards.

And while Starbucks has extensive experience leading food and beverage in executing contactless payments through mobile, Starbucks Touch the Drip is the company’s first foray into paying through a key ring.

Beams, a standout clothing brand from Tokyo offering luxury essentials, created five colors for the line: orange, black, brown, white and, of course, Starbucks green.

“The innovative tech companies will want payment technology to be frictionless and omnipresent, with fashion companies continuing to merge with technology to find solutions that are fashionable with the technology unobtrusively present,” Mr. Kramer said. “This ability has been enabled by the recent advances in contactless payments and NFC and will not be limited to just fashion accessories.

“Retailers and tech companies will continue to focus on ways to make the shopping experience easier and faster by eliminating the need for the customer to take a phone out of their handbag or pocket,” he said. “These advances will enable retailers to identify the customer, their personal preferences, loyalty status, and even preferred payment method.

“In fact, in the not too distant future we expect to see contactless payment expansion across fashion-aware industry categories such as automobiles and food, with local fuel pumps, charging stations and drive-throughs recognizing a customer’s payment preferences and loyalty affiliation when they drive up.”

Starbucks on mobile
Starbucks has been racking up wins on mobile for the past two years, many of them coming from innovations in transactions. Starbucks saw a sizable jump in mobile transactions in the first quarter of this financial year, with mobile orders jumping from three percent to seven percent of all transactions, and recently revealed that 27 percent of all transactions came fro mobile pay (see story).

And in a move that could possibly pave the way for widespread legitimization of the cryptocurrency, the company partnered with iPayYou to provide users of the Starbucks application an easy way to pay with Bitcoin (see story).

“In addition to the obstacles noted above, the consumer has to feel the solution is secure, adds value to their shopping experience, and, maybe most importantly, fits their lifestyle,” Mr. Kramer said. “Simply wearing a technically advanced looking watch will appeal to a very limited demographic.

“A fashionable device that simplifies our complex life will appeal to a much broader demographic.  This value could be measured in convenience, time saved, the ability to not carry a phone in some circumstances, or a more personalized experience.”