Starbucks Rolls Out M-Commerce That Can't Really Buy Anything

It's becoming the quintessential image of the 2009-era Mobile-Commerce app from major retailers. It's attractive, stable, slick and a little fun. But because of a well-merited petrifying fear of letting a mobile device actually talk with POS, it often can do virtually nothing, at least in terms of consummating transactions or even making it easier for consumers to make purchases. Starbucks' new mobile app is the poster child for such beautiful but ultimately impotent M-Commerce efforts.

In late September, Starbucks introduced two very different M-Commerce applications, both designed for the iPhone. One was for a very limited trial, impacting eight stores in Seattle and eight more in and around Silicon Valley (specifically Cupertino, Mountain View, Sunnyvale and San Jose).

That app, called Starbucks Mobile Card, allows a consumer to enter his/her Starbucks loyalty card number and to then see balances and related information. It also allows that consumer to enter a credit/debit card number and to use that payment card to add money to the Starbucks CRM card. A consumer walking into a Starbucks could then show the phone's screen and allow it to be scanned as payment, in lieu of using the actual CRM card.

Starbucks Mobile Card is a limited trial, but the capability to access data about the card value is useful even though such data could just as easily be accessed from the chain's Web site. There's also a question of whether forcing a customer to take out their phone and have it scanned is really materially better than having them do the identical thing with a card. On the other hand, consumers can forget their loyalty cards, but it's much less likely that they'll forget their phones.

The real problem child is the nationally rolled out program called MyStarbucks. It's also an iPhone app, and it offers a lot of Web repeat functions, such as a listing of all products and the associated calories and nutrients. Plus, MyStarbucks finds local Starbucks locations and provides basic information about each of the $2.4 billion chain's 15,700 locations.

Here's where things get frustrating. The app allows the customer to select and store a favorite location. It also allows that customer to create and save several favorite drinks, choosing from a laundry list of options. The problem is that there seems to be nothing digitally interesting that a consumer can do with that information, shy of posting it for groups of friends.

Why not take the next logical step and allow consumers to drag one of their favorite drinks to one of their favorite stores and have that data transmitted to that store, to save the time spent waiting in line to place the order and then waiting for that order to be made? The MyStarbucks app could even have been integrated into the Mobile Card trial, allowing for a complete buy-online-pick-up-in-store experience. There are quite a few reasons why it didn't.The customer chooses one of her favorite drinks—perhaps from a pull-down menu—and associates it with her store and then uses her newly funded Starbucks card to pay for it, all from her phone. She could then schedule a time—on the phone—to pick it up.

She arrives, skipping all of the lines—including payment—and grabs her already-paid-for order, and she's on her caffeinated way.

We spoke with several people working for or with Starbucks to try and get an answer to why Starbucks got so close to a powerful mobile app but stopped just shy of making something powerfully useful. Beyond being told that those kinds of integrated capabilities are likely to happen sometime in the future, nothing concrete about it was shared.

Starbucks is far from alone in being hesitant to cross that frightening POS boundary. Some have tried mild interactions. J.C. Penney has now started a trial at some 16 Houston area stores to read coupon barcodes from phones, a move that the chain claimed was the first such effort made by a major retailer outside of grocery.

But the danger of POS interference is virtually nil with that kind of barcode scan. The likely worst-case scenario would be akin to cashiers having trouble scanning the barcode on a box of cereal. They would likely give up and simply enter the code manually, with no probably POS damage.

To make the Starbucks integration happen—to create a true buy-online-pick-up-in-store mobile experience--would require a much deeper integration with the POS, which is not something that IT departments generally find comforting. At the very least, lengthy testing would be required.

A standalone mobile app—such as what Starbucks rolled out—might be less useful to the consumer, but it's a lot easier to sell internally.

A CIO at a very large restaurant chain said points of resistance will go way beyond IT. It might touch on store physical layout, with questions of how and where to set up that order pick-up line.

There are also questions of when the food/beverage order would be released. Coffee is very time sensitive. Should the onus be placed on the consumer to select a time of pickup and if traffic makes them late, it's their tough luck? The restaurant CIO said his chain has even gone so far as to explore GPS applications that would alert the restaurant when the customer's phone was within a pre-determined distance, as in "We'll get an alert when the customer's five minutes away and then we'll make their order." Added the CIO: "Maybe we don't make the order until the GPS detects them entering the parking lot."