Starbucks has broken ground on a new site in New York City, which might predict a changing future for your Frappuccino orders. Set to open on 5 November in Penn Plaza, ‘Starbucks Pickup’ is mobile ordering only … so if you want to grab your morning coffee from this location in the city that never sleeps, you’ll have to have their app.
The idea of this concept location is simple: Browse the menu, order and complete payment from your mobile device, then stop by the store to briskly pick up your order. This kind of ‘order ahead’ setup isn’t new, but removing the option to order from a human is.
It’s a radical move, given the fact that we know customers appreciate having various ways to pay. But, Starbucks, being the established coffee giant that it is, can afford to test unchartered models in different locations. During a chat with CNN business, Starbucks CEO Kevin Johnson said that, ‘Every store, every community, has its own personality […] The idea is to serve the multiple needs of that community.’
And, it’s safe to assume that those in the hustle and bustle around Penn Station, where the concept is set to launch, will appreciate the ease. More than 1 billion people worldwide will make an in-store mobile payment in 2020, so catering to the needs of the digital generation is paramount.
Great for consumers, but what about staff?
Impatient commuters and Starbucks super-fans are going to be happy, and it seems that this model will help keep overhead costs low, but at the very likely human expense of barista reductions. If this concept proves to be successful, there is an instinctual feat that we’d be moving towards a dystopian future full of robots, where human interaction goes down the drain. But in Starbucks’ case, and all of the coffee shops that might follow suit, there is a very clear need to keep staff engaged and on board – one that has an overall benefit for baristas as well as the business model.
The Starbucks mobile app had a bumpy start, with mobile ordering originally leading to (the company self-confessed) longer wait times and frustration on both sides of the counter. Not to mention a two percent decrease in transactions over that quarter. Now, with a wider digital reach, personalisation improvements in the app and the in-store process, things are heating up for mobile. And, in a way that still has humans as a valid part of the equation.
As coffee shops fight to differentiate themselves and consumers grow to be more and more demanding of their experiences, all coffee shops will have to strive to provide better service, while still looking at ways to keep costs under control. Starbucks included.
To stay on top of their game if they move forward with this mobile-only model, Starbucks will need to utilise employees in targeted areas, such as delivering more orders (now with the added perk of not splitting focus between the till and beverage-making), helping customers with questions or issues and maintaining a spotless shop floor. Plus, let’s not forget that employees are still the ones making the coffee.
Experiences are evaluated on the whole, and if Starbucks doesn’t continuously deliver on these elements, customers will turn to establishments that are clean and tidy, and where they feel looked after. According to a 2018 research report from Temkin Group, 86% of buyers are willing to pay more for a great customer experience. Customer experience is customers’ perception of how a company treats them and is what ultimately drives loyalty for a business. Starbucks’ brand boosting can be attributed to a whole host of factors, one being a welcoming space full of friendly baristas.
Starbucks can afford a lot of things, but not a future business model that doesn’t continually cater to the experiential demands of its customers. The overall experience is more valuable than just the ease of paying on mobile on its own, and this points to mobilising their employees in the most effective ways while delivering on the demand for mobile.
We know the future is mobile
Mobile ordering is a differentiator, and, more than that, it makes a difference. According to research conducted by Wi5 and Kantar, 69% of 18-34 year olds expect restaurants to have a mobile ordering solution in the future. It’s not a preference or a ‘nice to have’, it’s an expectation.
By 2020, the number of smartphone users is projected to reach 2.87 billion.
Moreover, this demographic checks their phones every 8.6 minutes on average, so a mobile-centric strategy is simply meeting customers where they already are. With a phone in billions of peoples’ hands, the ability to make purchases online is driving their purchasing power. The future is mobile driven experience backed by staff supported excellence.