After completing the Market Map individual assignment for mobile payments, I wanted to look further into how mobile payments are shaping retailers, specifically Starbucks. Starbucks has been notably recognized as a leader in mobile payment thanks to their mobile app that seamlessly integrates their loyalty program, My Starbucks Rewards, with the Mobile Order & Pay feature. Customers have adopted the mobile app rather quickly, and has ironically caused operational challenges to the business. The Mobile Order & Pay feature was designed to reduce long queues, but instead has created congestion at the handoff plane due to high volumes. This is discouraging walk-in customers to leave the store without making a purchase due to congestion and heavy rush. Currently, more than 1 in 4 U.S.-based Starbucks orders comes from a mobile device, one of the highest rates in the country’s retail sector and likely to continue to grow. Because of the large number of mobile-based orders, Starbucks is trying to deal with this demand that is causing operational challenges by introducing new in-store procedures and tools, adding new roles and resources to specifically support mobile order and pay and the testing of new digital enhancements.
Specifically, they are addressing this issue with additional staff and in-store kiosks completely dedicated to the filling of digital orders. It might resemble the Apple store’s layout. They might get rid of the counter, and instead have latte and espresso stations, where customers can simply walk up to the station. Starbucks recently added a text-messaging feature that notifies customers when their orders are ready and last week introduced voice-activated orders through its mobile app and Amazon’s Alexa AI platform.
With mobile payments on the rise, other retailers offering mobile pay-and-go services will have to adapt their retail experience to complement the technological progress.
Sources: http://www.salon.com/2017/02/07/a-digital-bottleneck-mobile-payments-breed-new-challenges-for-to-go-retailers/
Interesting article! The overwhelming amount of mobile articles is interesting in contrast to the constant criticism of too many Starbucks. Clearly the demand is there! I am also wondering if they experienced any security issues as a market leader in mobile payments.