Starbucks’ mobile ordering program drives 20pc of transactions during peak hours
Mobile Order and Pay now accounts for 10 percent of transactions in Starbucks’ busiest stores, a number that rises to 20 percent during peak hours, while transaction volume has grown 150 percent over the past year in the launch city of Portland, OR.
During its second-quarter earnings call last week, Starbucks revealed its Mobile Order and Pay program is still growing at a rapid pace, with a 13 percent year-over-year sales increase throughout the morning rush. The convenience of Mobile Order and Pay has been a huge driver for Starbucks and is still seeing significant adoption rates with app users, with 4 percent of total sales coming from the service, which is a sequential 40 percent increase.
“Starbucks is again at the forefront of listening to their guests and engaging them in meaningful ways,” said Paul Valle, vice president at Boston Retail Partners. “The demand for online ordering has progressed well beyond the desktop to mobile devices.
“Consumers want the convenience of ordering anywhere and anytime, including right from their phones,” he said.
Starbucks also sees 86 percent of customers who own iPhones and 79 percent of Android users pay with their mobile devices.
As a leader in mobile rewards and payments, Starbucks is continuing its success with Mobile Order and Pay, and will focus on developing the service further. To capitalize more on rewards targeting, the coffee chain will roll out new technology that serves loyalty users highly personalized deals and recommendations based on past purchases and history.
Starbucks recently upgraded its mobile rewards program, in which users now earn stars based on dollar spend rather than number of store visits. Within the past quarter, the retailer saw about one million new users in the My Starbucks Rewards loyalty program, an increase of 8 percent.
The retailer will also be rolling out a partnership program with JPMorgan Chase and Visa in which customers can earn Starbucks rewards points by using their credit cards at any retailer.
Earnings stars with Starbucks
To supplement the launch of the revamped rewards program – which enables members to redeem deals via the Mobile Order & Pay platform – Starbucks rolled out a redesigned application that showcases content personalized to each user, a first for the digitally savvy brand (see more).
Starbucks also fueled digital sales by inviting Twitter users to take a quiz designed to discover the coffee flavor best suited to their tastes and click through to a mobile-optimized shopping site to purchase a bag (see more).
“Pioneered in the pizza segment, the success at Starbucks shows the demand for remote ordering has progressed well beyond the fast-casual market,” Mr. Valle said. “Mobile Order and Pay is on the cusp of being an indispensable tool for both the guest and the brand.
“Guests seek the convenience of mobile capabilities, like online ordering, and are demanding it as a condition of their loyalty,” he said. “Brands want to take advantage of all avenues of engaging, maintaining, and growing their loyal customer base.”