Starbucks is intensifying its commitment to growing mobile and digital customer engagements, with plans to expand availability of Mobile Order and Pay to more customers, as well as embarking on a marketing push aimed at making the relationship between the retailer and its customers more personalized, according to a Starbucks press release.
The company unveiled the efforts at its annual shareholders meeting this week, as Starbucks CEO Kevin Johnson said the company is intent on growing digital relationships with the more than 60 million current U.S. customers who are not yet members of the retailer's Starbucks Rewards program.
One way the company hopes to do so is by expanding availability of the Mobile Order and Pay feature in its mobile app to non-Starbucks Rewards members, an effort starting this month. The company is also planning a series of marketing and advertising campaigns, both inside and outside stores, that it said are "designed to build personalized digital relationships with customers," according to the press release.
Starbucks has long been one of the retail sector leaders in terms of showing how mobile apps can be aggressively leveraged to drive sales, strengthen customer engagements and, to some extent, influence customer behavior. The company's ongoing interest in mobile payments to accelerate transactions has extended to the point that Starbucks has been testing a cashless store concept as well.
Starbucks was among the first to offer a mobile ordering and payment feature, which was initially offered only to members of its reward program. The good news was that Mobile Order and Pay was an instant hit. The bad news was that Mobile Order and Pay was an instant hit — to the extent that it led to customer traffic jams at some stores as baristas tried to figure out how to juggle mobile orders and in-store orders at the same time, along with managing traffic flow.
Yet, Starbucks has since responded to these problems. With the company choosing to open that capability up to all of its mobile app-using customers, that likely means either the feature continues to be a huge hit and Starbucks is confident it can manage the in-store traffic complications, or else usage of the feature isn't growing as fast as Starbucks would like and the company is hoping that unlocking it for more customers will produce the return on investment it has been waiting for.
To bolster the argument that this expansion is based off of success, Starbucks did announce in January that mobile orders represented about 11% of all U.S. store transactions last year — evidence that mobile ordering at Starbucks has matured beyond some growing pains. However, not all of Starbucks' customers are interested in using Mobile Order and Pay on more than an occasional basis, according to a Reuters report.
As Starbucks is going all-in on Mobile Order and Pay and the idea of forging personalized digital relationships with its customers, it will be interesting to see how many customers are ready for a more intense commitment, and how sensitive Starbucks is to how its mobile ambitions are potentially changing its own in-store culture.