Starbucks is Crushing it in the Mobile Space

Posted on November 9, 2011 by kennynorton No Comments

This morning I awoke with the great news that Starbucks Canada was going to begin to offer support for mobile payments in Canada. After Starbucks launched their “Gold Star” loyalty campaign a few weeks back in Mid-October, I’ve been waiting for an option like this, instead of having to use a clunky (unavoidable now a days) web interface, and also ensure that I have my loyalty card with me with every purchase. Not exactly convenient, especially when the balance runs out and you forget your password. There are plenty of failure points in this model (i.e losing the card, damaged card etc.)

Enter- the mobile app system. Now you can sync your Starbucks account/card to your iPhone once you download the app. It will only work on one phone at a time, and the whole app is quite simple, but very, very effective.

With the app you will get a run down of your balance. Which leads me to another point, you can actually add money to your Starbucks account on the fly. Which is very convenient. I was on my way to work, thinking about going to Starbucks and decided I would wait because I didn’t have a balance. As I was discovering the apps features, I had seen that the web app had saved my credit card, and I was able to load money on to my account in a matter of seconds. Something that would have taken me a good 5-10 minutes on the website, took me 5 seconds in the app. THAT is what mobile commerce is about. Convenience.

Other than the balance, you will also be able to click “Touch to pay” and it will display your Starbucks card bar code, in which any Starbucks Barista can scan just as they would any item in the store with a bar code. This is the only point in the process I think could be smoother, where I have to unplug my headphones, and pass my phone over to the Barista. I’m thinking a self serve option like a Mastercard “Pay Pass” might be the solution. It also didn’t help that it was the Barista’s first chance to scan one, so she was as confused as I was. But it worked out great.

Here’s a video demo of excactly what I did this morning (sans the Australian accent):

Overall the mobile payment process went over without a single hitch, and I was quite pleased with the experience.

Rewards Program

I mentioned the Starbucks Rewards program which has caught on quite well, I’ve found myself, co-workers and friends being even more loyal to Starbucks since the inception of the program to get the infamous “Gold card”. The Gold Card will get you many perks, including free coffee! With the new Starbucks app you can view how many points you have, which are accrued with 1 per purchase.

There are a few other features in the app, but most of them were already in the previous Starbucks Canada iPhone app. And none of them are as game changing as their new mobile payment loyalty program. I’ve never made a mobile payment before today, other than the obvious banking apps which was just savings to VISA. And I think many individuals who will sync the Starbucks app it will be their first crack at mobile payments. I think this app could be the beginning of a large movement in Canada to retire the infamous “Costanza” wallet full of loyalty and gift cards. Why not store them on your phone?

Tim Horton’s Tim Card

When Tim Horton’s launched the Tim Card it was a “head scratcher”. Why would I want to load money on to a card, and use it. Especially when most locations are now offering debit/master card. What do I get for doing it? There is no value proposition for the customer to re-fill a Tim Card. Starbucks has filled this void with the Starbucks Rewards program, and also given you no excuse not to with the new app (of course unless you don’t have an iPhone).

NFC

NFC (Near Field Communication) is rumoured to be a game-changer in the mobile payment space. Essentially it will be the self serve option that I mentioned above. You take your phone (with all of your information stored), tap the debit machine and away you go. Mobile payments currently are projected to rise to $240 billion in 2011 and potentially $1 Trillion by 2015. With a lot of that expected to come from Asia, most notably Japan and China (link ). Of course Canada is always well far behind in adopting similar technologies, so it may take even longer. However this Starbucks mobile payment system could be the beginning of a rise of mobile payments in Canada.

Augmented Reality

And as if this wasn’t earth shattering enough, Starbucks has been a trend setter in the news yet again today, with the launch of their new augmented reality holiday cups. For those that aren’t familiar with augmented reality, it’s essentially using the device to interact with the world around you in 3D, with graphics. It’s a really hot topic in the mobile world, and kudos to them for jumping at the opportunity.

Check out this video of their new “Starbucks Cup Magic” app. (Separate from the Rewards app).

There you have it, yet another game changing app for food/coffee establishments to marvel over. Whether people actually download and use this app is one question, the amount of earned media (PR/video views) they will get from this will be gigantic.

Crushing it

Remember when Starbucks had the doom and gloom surrounding them just a few years ago when they had to close over 600 stores in the US? They’ll be opening more than 500 new stores globally over the next fiscal. It’s because of things like their excellent “case study worthy” social media usage and the mobile development that I’ve mentioned here, why Starbucks is crushing it, and will continue to do so for the foreseeable future.

I will end it on this note. Starbucks: You get it. And your competitors don’t.

Related Posts: