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Starbucks raises the stakes on mobile ordering with significant expansion

Starbucks is rolling out its mobile order-and-pay feature to thousands of United States stores after recognizing its potential in Portland, the initial test market, to increase sales, shorten store lines and drive customer satisfaction.

In more than 3,400 Starbucks locations in the U.S., customers can now order and pay through their mobile devices to skip long checkout lines. This shift towards mobile ordering may force other retailers lacking this feature to incorporate it into their own plan, now that popular retailers such as Starbucks have made it a part of consumer’s everyday experiences.

“From one perspective, it is a virtual extension of the line in the store so more customers have access to the store so more sales can be made,” said Thad Peterson, senior analyst at Aite Group, Atlanta.. “It is also a great time and hassle saver for the customer, and since Starbuck’s is often an everyday spend item, it can be easily built into the customer’s daily rituals.”

“Mobile order and pay will become omnipresent in QSR and other high frequency, low average ticket venues,” he said.

Formula for success
Starbucks has created a positive formula with its loyalty program and mobile application that innovates a simpler customer experience. The retailer’s mobile efforts secure a customer relationship and positive brand sentiment.

Introducing mobile ordering and payments can only increase this sentiment. Not only will the customer using the feature have a more convenient experience, but it can also cut down in-store lines for other customers.

Mobile ordering is on the rise, and with a substantial retailer such as Starbucks bringing the feature to the forefront, this could be the leap that secures mobile ordering as an everyday staple rather than a perk. With mobile technology and marketing evolving at a rapid pace, it is important for retailers to stay on top of changes such as this. Getting involved too late could mean missing significant opportunities to drive incremental sales.

The Starbucks mobile order and pay has been added to its iOS app for iPhone users. To order through the app, customers click the order button in the top right of the screen, select the beverage or food they want and the location.

The app calculates the amount of time it will take and users can purchase through their registered Starbucks card. Customers can  simply arrive at the Starbucks location and pickup their order without any lines or checkout.

Mobile ordering rising
In March, Starbucks also added several shots of espresso to its mobile ordering strategy by announcing two delivery models, a tactic which will also be a game-changer for food and beverage marketers aiming to compete with the brand (see more).

McDonald’s also joined the shift towards mobile delivery by partnering with mobile application Postmates for a test at 88 New York locations, news that coincides with a business turnaround plan to increase profits and focus on consumer-driven decisions (see more).

As these mobile payment and ordering features continue to grow, it will be difficult for other retailers to stay away from such services. However, it is unlikely that it will attract new customers for Starbucks.

“I am sure that it will increase same store sales, and increase average customer spend, but I doubt that it will have a significant impact on acquiring new customers,” Mr. Peterson said. “That requires trial and a level of comfort with the service provider, neither of which will be significantly reinforced by a mobile order app.”

Final take
Brielle Jaekel is editorial assistant Mobile Marketer