ARCHIVES: This is legacy content from before Industry Dive acquired Mobile Commerce Daily in early 2017. Some information, such as publication dates, may not have migrated over. Check out our topic page for the latest mobile commerce news.

Starbucks whips up mobile ordering with delivery options

Starbucks is adding several shots of espresso to its mobile ordering strategy by announcing two delivery models, a tactic which will be a game-changer for food and beverage marketers aiming to compete with the brand.

On the heels of the Pacific Northwest launch of the Mobile Order and Pay feature, Starbucks will be testing a variety of delivery options this year, in accordance with its dedication to being a leader in the mobile space. If Starbucks sees a successful pilot with the delivery programs, this could raise the bar for other food and beverage marketers, especially those that have not yet cemented their mobile ordering capabilities.

“Offering a delivery service is about meeting our customers where they are in their day with both convenience and connection,” said a spokeswoman for Starbucks, Seattle, WA. “It is something our customers have asked for and with the launch of Mobile Order & Pay, now is the right time for us to explore this opportunity.

“As a leader in mobile payments, we will continue to ensure that we offer not only secure and convenient solutions to our customers, but also push the envelope in terms of mobile loyalty, customer engagement and relevance. We look forward to sharing more about this in the future.”

Streamlined delivery
Mobile Order and Pay, which allows customers to place orders via their smartphones and pay directly on the device, underwent a pilot phase in late 2014 before the rollout began in the Pacific Northwest region several weeks ago (see story). Starbucks is seeking to build upon that momentum by announcing its intent to test two complementary delivery options to cater to on-the-go consumers.

The beverage brand will be teaming up with on-demand delivery service Postmates to enable fans to order food and drink products from the Starbucks mobile application and have their items delivered within specific areas. Starbucks will be piloting this option in Seattle in the second half of the year.

Meanwhile, New York will be the testing location of choice for the second service: a “Green Apron” barista delivery feature that that would enable consumers in specific buildings to order beverages and food, which will be brought to them by a Starbucks barista. This will also begin in 2015’s second half.

“This new program will drastically augment the Starbucks service model by having on-demand delivery and on-demand pick up,” said Adam Meshekow, executive vice president of product strategy and national sales, SITO Mobile, Jersey City, NJ. “In a world where almost all businesses, from retail to QSR, are moving to an on-demand model it will decrease wait time, have immediacy and accurate ordering, and will allow more personalization of specific beverages.

“The old version of walking into a coffee shop and the person knows who you are and makes the coffee your special way is no more. Now the application will know what you order, reward you for your purchase, and even have the ability to upsell you for the incremental things that you have purchased in the past.”

Increase in demand
A national rollout of the delivery services will likely result in a spike in demand for Starbucks’ products. Time-strapped consumers, especially those in city environments, may also gravitate towards Starbucks over a competitor simply due to the delivery option.

“As mobile commerce continues to grow and there is a new distribution (in this case, delivery) there will be an increase in demand,” Mr. Meshekow said. “Some people in a city environment don’t want to go out in bad weather or the cold to get a coffee, and now they will be able to have on-demand Starbucks in the palm of their hand while still earning rewards.”

More brands are taking notice of consumers’ growing desire to receive their orders as quickly as possible. Amazon is now expanding its one-hour Prime Now delivery service to Baltimore and Miami after a pilot in Manhattan.

Ultimately, Starbucks is the raising the bar even higher for competitors such as Taco Bell and Dunkin’ Donuts. This news also suggests that mobile delivery services for food and beverage will become requisite for marketers in the coming years.

“I believe customers will respond well to this,” Mr. Meshekow said. “Starbucks created the first successful mobile payment mechanism in mobile by tying payment to reward through gift card transactions.

“I believe adding omnichannel capabilities to the chain will only enhance the consumer experience, ultimately leading to a more prosperous program.”

Final Take
Alex Samuely is an editorial assistant on Mobile Commerce Daily, New York