Starbucks is to rollout a new service across the US that enables customers to order coffee on their mobile device and then collect it in-store — with CEO Howard Schulz expecting a boost to both mobile payments and revenue.
The coffee chain launched Mobile Order and Pay in Portland in December 2014 and will now expand the service to over 600 stores in the Northwest over the coming months. The service will be rolled out nationally later in 2015, confirming an earlier forecast.
Speaking during the coffee chain’s Q1 2015 investor call, Schulz said the new service, which is available via the company’s existing payment app, has so far been “extremely well received”.
Interestingly, he also predicted the new service would drive “a significant increase” in mobile payment transactions in stores and have “a flywheel positive effect” on overall business.
He said it would increase MSR (My Starbucks Rewards), membership and app usage, as well as “creating significant additional one-to-one marketing opportunities.”
Schulz’s comments generated a significant number of questions from analysts on the call, indicating the new service has some importance within Starbucks’ overall business.
The company hopes to save time for customers by enabling them to order ahead of time, “resulting in shorter lines, faster service and improved in-store execution and an elevated Starbucks experience”.
The coffee chain is of course a poster child for mobile payments. On the call, Schulz recited a regular litany about the popularity of mobile payments.
Over 13 million customers are actively using mobile apps in the US and Starbucks is now averaging over seven million mobile transactions in its stores each week, representing roughly 16 per cent of total tender.
However, the final two statistics are similar to Starbucks’ claims for Q4 2014, indicating why the coffee giant is hoping Mobile Order and Pay will act as a stimulant on its business.