Starbucks takes sales-boosting Mobile Order & Pay nationwide

22 Sep 2015 | Author: | No comments yet »

Starbucks Kills Their Line With An App.

LOS ANGELES – Starbucks Corp on Tuesday said it is now offering its sales-boosting Mobile Order & Pay service in all of its more than 7,400 U.S. company-operated shops, completing its nationwide roll-out about three months ahead of schedule. For the last several months, Starbucks has been gradually rolling out the ability for customers to order drinks or food with the company’s smartphone app — and skip waiting in line during the morning rush.After a successful run in the Pacific Northwest and in states such as Alabama, Florida and Texas, Starbucks will extend its mobile order and pay feature nationwide starting Tuesday.Starbucks mobile-ordering service, which lets customers select coffees and danishes on their phones before walking into a store, is now available nationwide.

Starbucks new mobile ordering service, which allows customers to skip the line by ordering in advance from their phone, is launching nationwide today to bring on board some of the Seattle coffee giant’s most crowded stores.It’s 9:30am outside Starbucks’s two-story flagship store in the heart of Chicago’s prime aged meat market, the Viagra triangle, and though rush hour is over and the streets are otherwise empty, the long line pushes out through the chic steel-framed doors. The expansion includes some 3,400 cafes – including those in major cities such as San Francisco, Boston, New York, Chicago and Washington, D.C. – and extends the service to Android mobile device users.

The technology was switched on at Starbucks’ 7,400 company- owned cafes in the US after tests in select areas, the Seattle-based company said in statement on Tuesday. Using the Starbucks app for iOS or Android, you can now order a Pumpkin Spice Latte or anything else on the coffee maker’s menu, choose your preferred additives, and pay from right within the app. The service, which works with Apple or Android smartphones, will debut at some locations in the UK and Canada next month. “This is really meeting our customers’ needs for convenience in a way that’s never before been possible,” Chief Digital Officer Adam Brotman said in an interview. “It’s another channel that’s bringing additional business to the store.” Starbucks, which first tested the app last year and expanded that trial in March, is increasingly looking to mobile technology and other convenience tools to bolster US sales. The Seattle-based coffee giant will also enable the feature, previously available only on Apple devices, on its Android app, expanding its universe to the other half of smartphone users.

As part of today’s launch, Starbucks is also pushing out an update to its Android users that will allow them to be able to order using their phone for the first time. Already, many Starbucks customers pay for their purchases with their phones, an approach that frees them from having to fumble with wallets or rewards cards. Dan Beranek, the company’s director of digital strategy who is leading mobile rollout, tells me that when you couple a line with a commuter walking a block or two out of their way to grab a drink, it can add up to a daunting 15-20 minutes for a customer. Menu options highlight products available in specific geographic regions and stores, and orders are freshly prepared and ready for pick-up in the bar area. Those help customers customize food and beverage orders, check local inventories for the availability of product and accurately calculate pick-up times. “We’re hearing (from users) that is creating a whole bunch of new occasions” to visit Starbucks, Brotman said.

Mobile- phone payments currently make up about 20 per cent of Starbucks’ US transactions, and there are roughly 10.4 million active rewards members domestically. He was particularly bullish in his comments, adding “We have a winner and it’s running ahead of our expectations.” Although he declined to provide specifics, Brotman said adoption is exceeding the company’s predictions. In particular, he said, it makes it easier for time-crunched workers and parents to drop in and for speech- and hearing-impaired customers to customize orders. Presumably that estimate might climb during peak hours, but Starbucks insists that the addition of mobile ordering doesn’t slow down the workflow of its baristas.

While the app’s welcome screen is certainly tailored for speed—it can show you a menu of the nearest Starbucks location, present a montage of your most recent orders, and automatically remove items that have run out— the app’s most impressive feat is how deep it can bring you into the world of Starbucks order customization. But David Palmer, a longtime Starbucks analyst who works for RBC Capital Markets, says it’s as much as a 2 percent bump, which for a company with $19 billion in expected sales this year means hundreds of millions of dollars.

Besides busy professionals, he said other popular user groups include parents with young children and time-crunched workers, like admins or hospital workers, who only have a limited amount of time for breaks. Any drink you select features a deep customization screen with every possible option inside, in a long list of toggles and sub categories that looks straight of iOS Settings.

In a September note raising its earnings outlook for Starbucks, Palmer wrote that mobile order was key in driving the share of mobile payments to 21.6 percent of total sales in August 2015, up from 12.2 percent the previous year. It’s also a critical factor in Palmer’s rosy price target of $64 per share for Starbucks stock, which even in this year of volatile markets has defied gravity. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup. He said the technology had the potential to lure customers who may have been turned off by long lines and waiting times. “Lines are shorter, service is faster and in-store operations are more efficient” at cafes where the service is available, Schultz said at the time. (Reporting by Lisa Baertlein in Los Angeles; Editing by Leslie Adler)

RBC doesn’t spell out the details of its consumer panel-based research, but it says in the past it has proved accurate in predicting same-store sales growth in the United States. The company is working on adding suggestive selling features to encourage more food purchases, and it may expand its order-ahead capabilities worldwide. “This has been so well-received that we’re excited to be looking at potentially every store around the globe,” Brotman said. “But it’s still very early.”

Some baristas have expressed concern in online forums about whether bypassing the counter dilutes Starbucks’ oft-stated vow to create a human connection between its staff and customers. Brotman confirmed that its two pilot programs are still on track for launching this year, including one in Seattle through a partnership with Postmates, and another in New York, with baristas hand-delivering orders to clients who work in the same building. LAST CHANCE TO REGISTER: Don’t miss the GeekWire Summit on Oct. 1 and 2 in Seattle, featuring key execs from companies including Nike, Zillow, Concur, Xbox, Redfin, Uber and more. Plus, 500 Startups founder Dave McClure, the return of “Inventions We Love,” New York Times reporter David Streitfeld moderating a panel of Amazon veterans, and much more. But after I place an order for my iced, soy milk PSL two pumps of flavoring vs the normal four (recommended personally by Beranek), the order beams through the cloud, past everyone in line, and prints out as an itemized sticker that the checkout person sticks to my future cup.

And while that took a while, in the future, I could re-order this drink almost instantly because it sits as a custom PSL button right on my homescreen. “One of the things that we’ve found is, because customers have to set their order just the way they want it, there’s been an increase in order accuracy,” Beranek says. “When you communicate verbally with a barista, sometimes things are lost in translation.” The app tells me there’s a 3-7 minute wait time, calculated by Starbucks’s own algorithm that can account for the speed of each individual store, the average time it takes to make the drink(s) I ordered, and the relative hecticness during that time of day. That itemized receipt of my order has been stuck on the side of the cup, and it looks just like an itemized receipt has been stuck on the side of the cup. But as Starbucks expands into tiny fringe markets, delivery, and large office buildings, the future of the brand may be less about a novel in-store experience than it is the omnipresent drip of corporate caffeine. Convenience will only become more important as a theme driving the company’s bottom line, and the green-markered hashtag explanations on race relations, less so.

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