Starbucks apps and Mobile Payment – A runaway success

The Starbucks brand may be synonymous with pricey lattes, but the coffee conglomerate has pushed a number of mobile initiatives in 2011 to make its name also stand for digital innovation. And the number says it is working!

Starbucks has now processed more than 26 million mobile payments since January.

Add to that the fact that more than 6 million of those mobile transactions occurred during the past nine weeks — which is more than double the 3 million transactions the company saw in the first nine weeks post release — and the data shows a growing number of consumers are going wallet-free and opting instead to pay for their daily coffee runs with the Starbucks mobile app.

“We’re already out there as the largest retailer doing mobile payments,” Brotman said. “To take that step and roll out [mobile pay], see it adopted, and then see it double … that trend is very exciting to us.”

Starbucks mobile pay, a prominent feature of the company’s iPhone and Android applications, was released in the U.S. in January. Consumers can use the mobile app to load money on to a digital Starbucks Card and present a 2D barcode to pay-by-scan at the register at more than 9,000 locations. The program launched in Canada in November and will land in the U.K. in January 2012.

So far millions of customers have done so. The mobile pay feature, is especially popular in New York, Seattle, San Francisco, Chicago, and San Jose, all cities that are replete with brand fans and technology early adopters.

Of the $2.4 billion loaded on to Starbucks Cards in fiscal year 2011, $110 million was loaded on to cards via Starbucks mobile apps. The mobile figure equates to just under 5% of all reloads, but does highlight a shift in how customers engage with Starbucks cards. “Customers love the ease of [Starbucks card] reload and autoload on their apps,” Brotman said.

Mobile app users are also tapping the company’s e-gifting feature to send the electronic gift of Starbucks from their phones. E-gifting was added to the apps in June — it was previously available as a web-only feature — and now accounts for 10% of total e-gifting volume.

The company’s early successes on mobile have allowed it to experiment with apps like Starbucks Cup Magic, a one-off holiday application released in mid November that adds a layer of augmented reality to the in-store experience. An app user can point his device’s camera lens at a holiday character on Starbucks cups, coffee bags or in-store signage, and watch the character come to life. The app has been used in this capacity more than 450,000 times to date, Brotman said.

Starbucks also now has 3.6 million customers in its My Starbucks Rewards loyalty program, and 2 million members have reached the highest Gold level.

Altogether, the stats show that the company’s Starbucks Card, loyalty, payment, e-gifting and drink builder modules and programs are converging into a single, mobile experience that customers truly love, Brotman said.

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What Is Predictability In UX?

“Predictability in UX can be defined as how much a user can successfully foresee the result of an interaction.”

This can involve the meeting or matching of their expectations, whether in an initial experience or a repeat one. Conversely, unpredictability occurs when customers do not know what to expect or they expect something different to what they experience.

  • As part of Door knob example, the customer predicted that the door would work as he expected, and then it didn’t.
  •  Similarly, online shoppers expect their purchases to be shipped quickly and providers who don’t meet this expectation are unlikely to get repeat business.

It’s also about successfully matching a customer’s mental model of what an experience should be.

Mental models are internalized expectations of how the world works that customers use to predict outcomes. Meeting and managing these predictions are critical to business success.

For customers, predictability provides three major benefits:

  • A sense of control
  • Trust and safety
  • Reliability

Why Is It Important?

Why is predictability such an essential component of an experience? The clear outcome of a positive, predictable experience is the effect it has on customer satisfaction. Generally, it enhances the perception customers have of the company, and affects sales growth positively. Take Starbucks, for example; when it came into the market it created a worldwide phenomenon. Customers were given the same predictable experience every time they bought—no-frills, fast and friendly service, with coffee that tasted exactly the same every time, no matter when or where. The concept worked so well that, at one point, Starbucks was opening one store a day. It is easy to see how they have mastered a component of predictability through consistency.

Having predictability creates a positive psychological impact on customers. 

Woolworths in Australia is proud of the fact that the majority of their stores have the same layout. Any supermarket retailer will tell you, the one thing that causes more customer complaints and defections is moving a product from one shelf to another, so move the tomato sauce at your peril! 🙂

If you have ever visited BigBazzar here in India, for items that you buy regularly, try and note that how many times you know the exact location in which they can be found every time. This is predictability. This can ruin or raise the business for any retailer and for that matter any business.