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With the introduction of payment via mobile and a new and updated app, is this a new mobile era for Starbucks?

What opportunities are there for other retailers to follow suit?

I love Starbucks and am a regular down at my local Starbucks(s) (note the plural).

I was very impressed to see this month that the company has embraced mobile technology throughout its stores with gusto.

As the New Year rolled in, Starbucks rolled out a new app which allowed people to register their Starbucks card and then, with some new mobile scanners installed, pay in-store with their mobile phones.
 
Starbucks has clearly decided that mobile is the way forward with what must have been a large infrastructure investment, although it has decided not to bother with near field communication (NFC) as yet.

Whether this is because a large number of their customers are IOS users which doesn’t currently have this built in, time will tell.
 
Already, one in five of Starbucks customers pay for their purchases using their reward card, enticed by the offers of free Wi-Fi and a free drink as a reward for 15 in-store visits. 

With this new app, my debit card is linked to my reward card, which is linked to my phone, so when I am in desperate need of a coffee, or a calming half hour in Starbucks, all I need is my phone, which I’m never without.
 
Why would I now pay for my Starbucks any other way?
 
The additional data capture possibilities for Starbucks are endless…

•    Data such as favourite drinks, date of birth.
•    Frequently visited stores and number of visits.
•    Purchase trends and segmented customers.
•    Dynamic offers, promotions and communications. 

I’m sure mobile will be a success for Starbucks, and will pave the way for more retailers to invest in mobile technologies, which ultimately, make purchasing easier for customers.
 
But what could this mean for other retailers, both on our streets and off?
 
Here’s just some of our more immediate predictions:

  • Clothes retailers marketing accessories and additional pieces to create a capsule wardrobe depending on previous purchase history via mobile connection?
  • Lunch chains to develop mobile ordering, with instore collection and payment via mobile.
  • Development of webcam technology to allow e-commerce purchases by showing a mobile screen to your webcam.

Starbucks has really set the mobile commerce bar high for 2012.

My prediction? This is the year that retailers and the public will embrace mobile for mutual satisfaction.

Ben Staveley

Published 1 February, 2012 by Ben Staveley

Ben Staveley is Head of E-commerce at dotCommerce and a contributor to Econsultancy. 

5 more posts from this author

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Geofferson Marcy

I've been using this since they launched in Canada late 2011 and its really great. One weird thing is that they snail-mail you the bonus drink voucher (with gold status you get a free beverage every 15 stars), which flys in the face of the instantness of the app.

almost 5 years ago

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James Sherrett, VP Marketing at Mobify

Starbucks are clearly a leader in understanding how their customers use mobile, then incorporating that understanding into the digital experiences they provide.

Working with them on their mobile web experience it was clear they had invested in the people and practices to learn and build fast.

Very few other companies are keeping up and pushing technologies like responsive design and the Mobify Platform with as much innovation.

Starbucks are leading and extending that lead.

almost 5 years ago

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Chris Dalrymple

"Why would I now pay for my Starbucks any other way?"

Because it's clunky, and slow, and the staff don't always understand how to use it...

Probably being slightly unfair, but I *have* switched back to using the card after a couple of attempts with the app because the app takes so long to process the transaction. When it doesn't work properly Starbucks staff tend to be unsure of what to do.

The key thing here is while the idea is great, the systems integration and training has to be equally good to make sure it's a viable way to pay.

almost 5 years ago

Julie Walker

Julie Walker, Director at Purple Spinnaker

Starbucks are leading the way in creating mobile and social strategies which listen to and respond to their customers through creating new products and experiences which are in line with their customers feedback.

In 2010, Starbucks customers loaded US$1.7bn onto their pre-pay reward cards, and if you look at Starbucks operating margin of 13%, you could look at this as their customers provided a cash injection of US$220m to be used for growth projects, innovation and new product development.

Add to cash injection, a more indepth understanding of the starbucks customer through their mobile buying behaviour, their social insights and listening strategies, their branded social prescence on facebook and twitter and their internal customer idea community mystarbucksidea, they have created a trusted relationship which provides the opportunity to work in partnership with their customers to grow their organisation.

Having recognised the benefits of operating in this way, the Starbucks Senior Management Team are adapting their business to become more responsive to the customers and to deliver new experiences with their customers, permission and inclusion, which in turn makes it easy for both starbucks and their customers to develop a partnership for growing the organisation.

Social and mobile are great engagement vehicles, which can support overall business goals and as more organisations learn about the value of integrated strategies beyond the tactile projects more great examples will evolve.

almost 5 years ago

Gray Sycamore

Gray Sycamore, Chief Strategy Officer at Mobileize

An app such as this is clearly great for Starbucks fans, but many high street brands face the problem that not everyone has their app, or necessarily wants it. The real opportunity around mobile from a business perspective is to reach and convert the customers that aren’t aware of or currently using your brand – the upside potential of doing that is going to be many times larger than preaching to the converted. This is the limitation for most app based strategies, however well executed they might be.

almost 5 years ago

Tim Watson

Tim Watson, Email Marketing Consultant at Zettasphere

I would really like to try this but Android version is not available in the UK as far as I can tell.

Whilst Starbucks are being very forward thinking with mobile apps and payment, fully integrated, they are missing the boat when it comes to their emails. Not at all well considered for mobile viewing.

almost 5 years ago

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peter warne, comms manager at Nestlé

What's the fuss about Sbucks? The Swiss railways have had all this and more for a while. Not only can you buy on-line, but the app updates with information on the route you have bought a ticket for as you travel. I would say that the SBB (Swiss railways) is clearly a leader etc etc etc, but since they are not American they are ignored.

almost 5 years ago

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