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Starbucks craves double shot of mobile ordering with expansionBy
Starbucks is likely to see sales bubble over as the brand rolls out its Mobile Order and Pay functionality to the Pacific Northwest, cementing its status as a mobile leader to beat in the crowded food and beverage sector, which counts Taco Bell and Dunkin’ Donuts as major competitors.
The beverage brand will be rolling out the feature to residents in Idaho, Washington, Oregon and Alaska, with approximately 650 bricks-and-mortar stores expected to receive the capability to fulfill orders placed on mobile devices prior to customers’ arrivals. Mobile Order and Pay was first piloted in Portland in December 2014.
“It’s no surprise that after its initial test of mobile pre-order and pay that Starbucks is expanding its offering quite significantly,” said Puneet Mehta, CEO of MobileROI, New York. “The feature is textbook for removing friction from the customer journey, which needs to be a focus for all brands.
“Every company needs to look at their current customer processes and see how they can modernize them – in everything from loyalty rewards and offers to payment and cross-selling,” he said. “Starbucks has long been regarded for its focus on providing a superior, seamless customer experience (in-location and mobile), which is why it’s rare to pass any of its coffee houses without seeing a long line out the door.
“(For the customers who are dismayed by these long lines, mobile pre-order and pay will certainly be welcome news).”
Starbucks’ dedication to mobile strategy is indisputable, and has been corroborated by it being one of the major brands to first introduce mobile ordering capabilities. Guests can place orders for their favorite beverages before they arrive at their local Starbucks, and pick them up immediately once they arrive.
The function also enables users to pay directly via their smartphone. The Mobile Order and Pay feature is integrated within the brands’ popular My Starbucks Rewards program as well as its mobile application, so that consumers do not need to download a separate app.
However, Starbucks runs the risk of temporarily alienating its Android consumers by only offering Mobile Order and Pay for iPhone users. If the rollout in the Pacific Northwest proves to be successful, the brand should certainly turn an eye toward Android platforms very quickly.
The brand is planning to introduce the feature throughout the nation this year, and believes it represents Starbucks’ goal of retaining its stronghold in the mobile space. However, the brand may see some initial challenges during the rollout.
“Another issue that could possibly arise is that the actual item ordered through Mobile Order and Pay may not end up being what’s handed to them when they pick it up at their local Starbucks,”said Jeff Fagel, chief marketing officer of G/O Digital, Chicago, IL. “Besides the initial frustration of waiting for the barista to whip up their new latte (which will subside quickly for most), that extra delay could frustrate more than just that shopper – it could make the line inside the local Starbucks even longer.
“And we know all too well just how quick and easy it is for someone to shame a company on social media when the experience doesn’t meet their expectations,” he said. “So the mistakes of Mobile Order and Pay could get taken out on a local Starbucks location that wasn’t the one who made the mistake.”
Starbucks also believes that Mobile Order and Pay can streamline the beverage-making process for store associates, in addition to customers. The brand expects service speed to increase thanks to the capability, which was also designed to help drive transaction amounts.
If the feature proves to be a hit with employees and consumers, it may also drive more repeat visits from loyal customers, especially those that prefer to have a morning coffee before work.
“The real challenge will be when they actually start delivering their coffee to your desk or home,” said Lior Sion, chief technology officer at Bringg, Israel. “The biggest challenge is that when faced with customer needs and wants, they will find themselves forced to invest in mobile technology more and more.
“As this is not their forte, it might become a never-ending effort.”
Starbucks’ winter strategy in 2014 saw many financial gains for the brand, as social media chatter surrounding its signature red holiday cups reached a fever pitch, with many consumers uploading their drinks onto Twitter and Facebook in celebration (see story).
This nabbed Starbucks the top spot on Hootsuite Analytics’ December 2014 Love List.
Ultimately, if Starbucks manages to circumvent any difficulties with store employees’ experiences with Mobile Order and Pay, the strategy is likely to resonate very positively with beverage fans across the nation.
“When it comes to customer experience and service, the name of the game is quality of the service provided and the price you pay to get this quality,” Bringg’s Mr. Sion said. “Starbucks worked for a long time and paid a lot to get this feature out there.
“Competitors should leverage the knowledge of specialists to get better results faster, and for a lower cost.”
Alex Samuely is an editorial assistant on Mobile Commerce Daily, New York
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