Starbucks to Open Mobile Order and Pay Floodgates This March
Starbucks has been the poster child for mobile order-ahead and mobile payments integration for some time now. So much so, in fact, that it’s also managed to serve as a cautionary tale about what happens when you don’t plan ahead for the onrush of new business such a service can create. Starbucks itself, meanwhile, is about to double down on the program by opening it up to literally everybody starting this March. Starbucks’ CEO and president Kevin Johnson announced the move during an investor conference call.
While previously, mobile order and pay was only available to those on the loyalty program, the new move will open up the floodgates and bring in anyone who uses the app. Since mobile order and pay already represents 11 percent of Starbucks’ transactions in the United States for just the first quarter of 2018—that’s up from 10 percent in the preceding quarter—the idea that more users would be interested isn’t out of line.
What’s more, this also comes on the heels of less-than-stellar growth for overall Starbucks sales; the US market managed to post just two percent growth for the quarter, which, given that that data took place during the holiday shopping season, suggests that Starbucks may be eager to infuse more sales into the overall picture.
At any rate, Starbucks may have the right of it here. With customers so readily switching to mobile order-ahead and pay options, bringing in more customers to take advantage of it could light a fire under Starbucks’ bottom line. The old problems about overcrowding may be falling off, especially if customers start migrating to mobile; the big problem was that there were too many real-person counter orders conflicting with the mobile orders coming in. If there are fewer counter orders, the problem may fix itself. With a surprising slump in sales—you’d think that shoppers would have stopped in for a quick shot of caffeine while doing holiday shopping, especially with festive beverage options available—it’s clear Starbucks needs to make changes somewhere.
With sales looking a bit lackluster, a little more mobile may be just what Starbucks needs here. Hopefully we’ll get some fresh numbers after the change in March and make some new projections accordingly.