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Starbucks reinforces mobile leadership with pre-ordering debut

Starbuck’s beta launch of mobile pre-ordering in South Korea sets the stage for a broader roll out and has the potential to be another home run for the chain if it can successfully reduce customer wait times.

The company-first Siren Order service enables rewards members to make pre-payments for beverages through the native Starbucks app. While numerous quick-service restaurants have embraced mobile pre-orders to reduce wait times for customers with reportedly mixed results, Starbucks, whose app has already been a major success for the company, has a lot riding on its ability to get this right.

“Almost no other retailer offering mobile payments has figured out a formula of simplicity and flawless execution near Starbucks,” said Marc Parrish, an advisor at Appboy, New York.

“They wouldn’t be pushing this so heavily if was not operationally and financially a wild success. If they introduce pre-ordering to the mobile app it could reduce the lines to near zero,” he said.

Mobile pre-order gets steamy
The Siren Order service notifies customers via mobile throughout prep with messages such as “order approved,” “beverage being prepared,” and “ready to be served.”

Adding shots, flavored syrup and whip cream, or desiring low-fat milk or soy alternatives can also be accommodated during order using the QR code preinstalled in the application.

Siren is expected to mitigate the frustration and hassle from waiting in lengthy lines and put a hot beverage in quenching hands quickly during peak hours.

But there is potential for disaster when contemplating the accuracy and efficiency when digital is in charge, such as the risk of lost orders, cold orders or delayed output.

BI prioritizing
Panera Bread announced last month its claim to combine several technologies inclusive of store kiosks, online and mobile ordering, to slash the number of registers in-store, a change which will be completed by late 2016.

Food will be delivered to tables and customers will be empowered to place orders from their smartphones or laptops while seated. They will also be able to place to go orders from mobile devices or online up to five days in advance and pick up the orders at a pre-scheduled time.

Panera execs admitted during a recent conference last October that they were turning customers away due to long wait times.

Since inception, QSRs have relied on a system which natively results in long lines. Ambitious vendors such as Panera and Starbucks are pioneering the next wave of quick-tech geared at speeding up service.

Further investment
Without enough space to create separate mobile “express” lines and budget to invest in more staff, pre-ordering could make operations even slower than they presently are.

According to The NPD Group’s most recent survey, spending in restaurants by consumers rose only 2.2 percent in November 2013, albeit Starbucks became an exception with a 12 percent sales increase.

While the industry remains fragile, it shows little signs of improvement despite a surge in pre-ordering apps such as Seamless, which offers food delivery from local restaurants.

Last year the mean wait time for all national restaurants was 23 minutes, according to a report of 8,500 locations managed by hospitality software provider Long Range Systems.

Within the course of twelve months, 54 percent of restaurant managers said wait times increased, 15 percent said they remained stagnant, and 31 percent said they fell.

Consumers are communicating that their time is more valuable than ever and they are growing less willing to withstand long waits. Simply, if a restaurant takes too to serve, customers will go elsewhere.

“Starbucks has done a great service to its customers thus far, letting them electronically track all the gift cards they receive, and instantly showing them customer loyalty points.  As a byproduct, they have hundreds of millions more dollars being put onto these cards by the 5M weekly customers using the app who set it on auto top up,” Mr. Parrish said.

“Their experience in the U.S. would support that mobile pre-order is an effective tactic for reducing long lines and wait time, as they are currently doing $1 billion a year on their mobile app now.”

Final Take:
Michelle is editorial assistant on Mobile Commerce Daily, New York