April 4, 2017
Seattle-based coffee giant Starbucks was one of the first major chains to offer its customers the option to order ahead and pay via a mobile app on their phones. In a January earnings call, the company pointed to significant growth in the adoption of Mobile Order & Pay. Growth was so strong, however, it was leading to long waits at the pickup counter. The company promised in the call that it was already working on ways to alleviate the problem. One possible solution emerged late last week when a letter to employees was leaked to news outlets: the company will test a location in its Seattle headquarters dedicated to servicing only mobile orders.
“The success of Mobile Order & Pay has created a new operational challenge that has been building in lock step with volume growth, and it’s most pronounced in our highest volume stores at peak, causing significant congestion at the handoff plane,” COO Kevin Johnson said during the recent earnings call. “This congestion resulted in some number of customers who either entered the store or considered visiting a Starbucks store and then did not complete a transaction.”
According to the letter, the new store located in the company’s headquarters will open this week. Starbucks will see if dedicated pickup stores, along with other “digital enhancements” like text notifications when an order is ready, will be cost-effective ways to ease the crush at the mobile pickup line.
Johnson noted that Mobile Order & Pay accounted for 7 percent of total transactions in Q1 2017, up 100 percent from the year before. At peak times, Mobile Order & Pay accounts for 20 percent of transaction volume or more at nearly 1,200 of its locations. That only happened at 13 locations a year ago, Johnson said.
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