Starbucks is well known for proactively embracing cashless payment methods. The Seattle-based company hit the headlines a few years back when it teamed up with Square to process mobile payments. Its mobile payment app is already well known for enabling users to pay by scanning the bar code tied to the account in the app. In a recent development, the company announced that it has taken the next logical step by integrating a preorder feature into its app.
Long queues at Starbucks outlets have been a regular sight over the past few years. We see the preorder feature to be a part of the company’s effort to reduce waiting time and enhance the customer experience. The feature will arrive later this year.
The Starbucks app processes about 5 million transactions every week.
Although Starbucks has good intentions, we have reservations about such experiments in the long run. In fact, we see this move potentially making the wait time even longer for Starbucks customers!
We are all for cashless-payment innovations and adoption by retailers and restaurants around the globe. But there seem to be basic flaws with this solution that create doubts in our minds.
For starters, preordering has not really picked up much in the US, primarily because it requires users to preplan. Visiting the nearby café is more often than not a momentary decision. Restaurants such as Panera and Chipotle have tried the preorder model before, and we can safely state that they did not meet with much success.
The feature will lead to separate queues that will require more manpower and space to manage. Most Starbucks outlets might end up being cramped for space, and the staff cost might shoot up significantly. If the company does not pay attention to these issues, the queues could very well move at a slower pace. Spending in restaurants has grown at a modest pace of less than 3% in US over the past year. Although Starbucks has managed a much higher growth rate than the industry average, the average wait time has not improved much in the past year, even though customers already have the options of using popular preordering smartphone apps, such as Seamless. Thus, Starbucks is not bringing anything new to customers.
Besides, this app does not deliver coffee to customers’ premises. They still have to go to the outlet and get in the queue, after taking the trouble of prebooking through the app.
The company seems to be confident about the new move. It claims that the idea for the order-to-app originated about 10 years ago, but the company took its time making sure it made the right technology decisions.
The company’s chief digital officer, Adam Brotman, said it will start testing rollover in a few months in select stores. We will keep a keen eye on the latest developments.