While standing in an endless line at a Starbucks this weekend, I found myself wishing I lived in Portland. Not because the city is known for great coffee houses, even though it is, but because the single Starbucks that serves the roughly 40 square miles surrounding my home is so busy, that if I'm to have any hope of a double espresso, it lies in the chain's new app now being tested in Portland.
Starbucks is testing a mobile order and pay app at 150 Portland-area stores through the remainder of 2014. The app will enable customers to place orders and pay in advance, and then pick them up at a selected Starbucks location. It's a trial balloon prior to a national rollout and one that Starbucks' customers, already a mobilely engaged bunch, will likely welcome and utilize quickly.
Starbucks' mobile presence is a case study in success for retailers and this test should help prove the concept for others.
The Starbucks app is on track to process over $1.5 billion in payment volume in the U.S. in 2014, according to a Business Insider report. For the second quarter alone, it was responsible for roughly 6 million transactions a week, or 15 percent of purchases at U.S. company-operated stores.
"We do believe that this will increase our sales and will increase the throughput in our stores," Adam Brotman, chief digital officer, Starbucks, told Bloomberg. Anyone who has observed the set-up inside a Starbucks can see just how fast employees work to fill orders. Stores are rarely understaffed behind the counter, but the order-taking process is what usually causes delays.
Leveraging mobile to solve this problem is smart, and something that retailers need to be testing.
Because after 10 minutes in line, during which time a single customer placed an order, the register ran out of receipt paper and a half dozen cars picked up at the window, I left empty-handed. We considered getting into the drive-through, but before we could navigate the parking lot, three cars filled with post-soccer practice girls and moms got there first. The thought of waiting until all those frothy specialty drinks were made was too much.
But if I lived in Portland, I could have placed an order, paid and picked it up rather than getting frustrated and leaving.
I realize there are bigger problems in life than being denied strong coffee. But on that cold and dreary fall day, the promise of espresso was a treat that helped mitigate the household chores and make a trip to the home improvement center less painful. Had I the ability to order ahead, from the home improvement store, that afternoon would have ended much differently. Not only would I have been a happy customer, but Starbucks would have added my money to its balance sheet.
If I extend the order-ahead promise to other merchants visited on a regular basis, it becomes easy to see big benefits.
The visit to CVS would be cut in half if NFC scanning and mobile payments were enabled. The store is small, but lines are long thanks to a convoluted loyalty program that forces shoppers and cashiers to toggle between cards, mobile devices, and electronic and paper discounts. And navigating a City Target becomes easier with an order ahead option, as does a quick after work pick-up at the grocery store for dinner that night.
Retailers are often loathe to lose the sale generated by a store visit, where impulses are acted on to drive basket size, but think about the benefits.
All of this ran through my head while waiting in line that Saturday afternoon at Starbucks, when I had plenty of time to think.
Using mobile to speed ordering will certainly serve to increase sales, improve the customer experience and drive loyalty. Concerns and goals for all retailers, not just those serving strong coffee. -Laura