December 6, 2014
Starbucks recently launched its ‘Mobile Order & Pay’ service in Portland and is expected to introduce this feature across all U.S. outlets in 2015. Mobile Order & Pay allows customers to place orders in advance of their visit and pick them up at their chosen Starbucks store. The mobile ordering experience is seamlessly integrated into the Starbucks mobile app and the My Starbucks Rewards loyalty program.
The new service is available for customers using the Starbucks app for iPhone. The app interface shows store locations which appear based on the GPS functionality of the customer’s iPhone. The mobile ordering process simply involves scrolling through the menu on the app interface, picking your choice of items and your store of preference and then paying using the in-app payment system. The particular store gets notified of the order, which is kept ready by the time the customer arrives at the store.
Here is a video illustration highlighting the service:
The new experience would help shorten the usual long queues at Starbucks outlets. The service is currently available for iPhone users in Portland only and would soon arrive for Android users once the service is launched nationally next year.
We are all for cashless-payment innovation 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 last minute decision, and exactly what to order can be impulsive. Restaurants such as Panera and Chipotle have tried the preorder model before, and we can safely report 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 the 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 option of using popular preordering smartphone apps, such as Seamless. Thus, Starbucks is not really bringing anything new to customers, but then may be they can pull it off because of something unique on the operational front.