Starbucks Serves Up a Great Mobile Game

After my last post about the importance of mobile marketing and best practices, I also wanted to highlight one of the leaders in mobile marketing – Starbucks – and why they are so successful.

First and foremost, Starbucks has spent countless hours researching its consumers’ buying habits and developed a strategy that reaches consumers where they are – mobile devices. The basis of Starbucks’ genius is – of course – its app. The app gives Starbucks the ability to not only interact and engage with customers, but also collect information on its customers’ wants and needs. The App allows customers to place orders, locate stores, hold gift card information and receive rewards from its loyalty program. The simplicity, ease of use, discounts and rewards help retain customers since they need to keep continuously using the app to reap the benefits.

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Its in-app loyalty program is one of the key components of Starbucks’ success. Its loyalty program has eliminated the need for stamp cards and moved everything to the mobile app. While Starbucks was not the first to do this, they have been able to effectively personalize incentives that increase customers’ use on the app and buying habits to earn rewards. Each time a purchase is made, the customer earns a star. Once a certain amount of stars are earned, the consumer is eligible for more benefits. Additionally, Starbuck utilizes its most engaged customers for surveys in exchange for stars. This increased usage on the app translates into more data collected and more consumer insights for Starbucks.

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In addition to its mobile app, Starbuck effectively utilizes many other components to round out its mobile strategy. For its mobile advertising campaign, Starbuck utilizes large rich media ads instead of smaller static ads that people often accidentally tap. These larger ads expand to fill the full screen and are interactive, encouraging users to engage with the brand. It also utilizes a SMS in its mobile strategy to capture customers who don’t use its mobile app to promote seasonal specials and drive customers to locations. It is also another channel for Starbucks to send rewards to customers who do not use the mobile app. The success behind all of these tactics is Starbucks’ ability to be creative and think beyond the traditional ways of advertising.

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Moving beyond the advertising and mobile apps, Starbuck has taken mobile convenience one-step further by introducing mobile payments and on the go ordering. Customers are now able to use their smartphones to pay. All they need to do is shake their phone for the payment barcode to display. In addition to mobile payments, Starbucks began rolling out its mobile order and pay feature last year. The mobile ordering system allows customers to order and pay before arriving to a Starbucks location. The additionally benefits and effectiveness of these new features was summed up perfectly by Adam Brotman , Starbucks Chief Digital Officer:

“Bringing Mobile Order and Pay to our customers is about meeting their needs of convenience and customization at any time of the day. The fact that is also represents the fastest technology application rollout we have ever done is indicative of the strength of our digital ecosystem, how well it has been received by both our customers and store partners and the impact we think it can have on the future of retail.”

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In order to make all of these mobile innovations happen, Starbuck invests heavily in the latest technology. It also pays careful attention to what its customers are saying via social media. Starbucks closely monitors tweets, posts, and trending items to remedy any problems, deeply connect with customers, and creatively utilize user-generated feedback. It has been named Mobile Marketer of the Year multiple times and seen usage of its Mobile Order and Pay double year over year to over 8 million transactions a month. Additionally, it has seen membership grow by 16% and member spending increase by 22% in the last year. Starbucks continues to be a mobile leader by capitalizing on consumer insights, testing out new products, and developing new technology that takes its customers’ experiences to the next level. Starbucks doesn’t just follow trends, it makes them. The next experience that the company is testing is its coffee delivery service, however, it is said to be in the very early phases.

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I’m not sure how many of you use the Starbucks app, but if you do you know just how amazing it is. For me, most mornings start by opening the app and seeing my most recent orders. I’m then able to confirm my order and choose the store where I would like to pick it up. I then pay for everything via the app and my coffee is waiting for me 5 minutes later. There is no waiting in line, no hassle, and extremely convenient – I love it! Have you had similar experiences with the app? Are there other apps that provide a great customer experience that you love?

6 comments

  1. As an avid Starbucks drinker, your post sparked my interest! I am such a fan of the starbucks app- I think that it really simplifies the process, and when you are in a bind, helps mitigate the time spent in the store. I liked how you highlighted the benefits of the app and what makes it so successful. It is interesting how few businesses have followed what Starbucks does for their app in order to make business more streamlined. I think the one room for improvement for the Starbucks is the ability to personalize your order. While there are ways such as milk choices, size cups, etc, there are many limitations. For those who really want a personalized beverage, I definitely think there is room for improvement for the Starbucks app.

    Overall- great and interesting post. I loved your facts, especially your point about large media ads- this is something I never thought of before, and how it can lead to the success of Starbucks app.

  2. Nice post. We used to do a case on Starbucks in this class, because of the innovative ways they apply technology like you mention in this post.

  3. Great post! As someone who has used the Starbucks app probably a bit too much, I thought this was a really interesting read. I love being able to order on my phone because it allows me to really customize my order without having to awkwardly try to explain the complicated order to the barista. This way I can have my tall vanilla bean frappucinno with skim milk, half the amount of vanilla bean powder, one pump of mango syrup with no whipped cream, and the poor barista at least won’t have to handwrite that entire order.

    Something else that I had thought Starbucks had done well was their birthday reward. I feel like it’s gotten stingier, though. A few years ago I believe you could redeem it any any point during your birthday month, or at least a week before and a week after your birthday. Last year they changed it so that you can redeem it starting two days before your birthday up until the day after your birthday, so the window is now only a tiny 4 days. And in the past they would send you an email letting you know you could redeem the reward, but they never even told me I had the reward available, nor did they tell me when it was expiring soon. You’d think by having such a strong digital app that they could give users a notification to claim their birthday reward, but it seems clear that they don’t want people to be redeeming the rewards and would rather people forget to use them.

    This post also reminds me of how they revamped their rewards program with the stars. Before every purchase got you 1 star and 12 stars got you a free drink, but now the stars are done by the dollar amount spent. It seems like a more practical move on Starbucks part, since at least you know exactly how much a customer will spend before being able to get something for free. A lot must have gone into that revamp, though, considering how many customers who had the app would have been effected.

  4. Awesome blog post! I love using the Starbucks mobile app and I really think they were the pioneers in building an amazing digital reward loyalty program and mobile payment system. It is so simple and really incentivizes the consumer to keep coming back. Apps like this are great for brands to keep users loyal and they can provide even more incentives easily by shooting out coupons and specials to get them to be repeat users more often. I wonder how they will continue to keep the growth going while keep the ease of the app in mind, as I believe that is it main selling point and what gives it a great UX.

  5. The Starbucks app is a huge game changer. For all the reasons you outlined, I too love the app and all of its capabilities. Not only is it a strong asset because consumers enjoy using it, but I imagine Starbucks actually gains a lot from the app as well. With the sheer volume of orders placed on the app, Starbucks must collect an insane amount of data on their consumers. From what I drink, to how much I spend, to new products I’m likely to try, Starbucks can deduce a lot of information about me as a customer. This is hugely valuable for Starbucks, as it allows them to potentially have highly personalized marketing efforts and encourage me as a consumer to buy more. The app is great for the consumer, but also extremely valuable for Starbucks.

  6. Great read! I think Starbucks led the movement to go to mobile – at least from my recollection, I believe Starbucks was the first large scale coffee chain to implement the use of a mobile app. It’s great to see how successful it’s become. Being in an operations class right now, I’ve definitely been able to see another side of the digitization of ordering – it makes the whole process for Starbucks to make more coffee much more predictable and less variable. This reduced variability increases Starbucks’s ability to predict orders much better.

    What’s interested as well is the analytics Starbucks can do from the data it’s able to gather. Like Kelsey mentioned, the data allows Starbucks to make huge conclusions about their services. I’m sure this has increased their revenue and profit substantially. It’s amazing to know how many different aspects data analytics can impact in a company. Thanks for posting.

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