More consumers are using their smartphones to pay at the coffee shops operated by Starbucks Corp..

Mobile payments accounted for 24% of Starbucks’ transactions in the second quarter of the company’s 2016 fiscal year that ended March 27, said Kevin Johnson, president and chief operating officer and director to investors in an earnings call, according to a Seeking Alpha transcript. Starbucks is No. 443 in the Internet Retailer 2016 Top 500 Guide.

Starbucks’ Mobile Order and Pay program—which allows a consumer to order food or a beverage ahead of time and have it waiting for her at the location when she arrives—also got a nice jolt this quarter. Starbucks finished rolling out the program at all of its company owned locations this quarter.

For each month in Q2, Starbucks processed 8 million Mobile Order and Pay transactions, up from 6 million a month the previous quarter, said Adam Brotman, Starbucks’ chief digital officer.

The order ahead of time mobile program makes up 4% of total transactions in the quarter, Brotman said. That percentage also increases the busier the store gets.

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In Starbucks’ busiest 300 stores, Mobile Order and Pay accounts for more than 10% of all transactions, and in the peak hours at those stores, the mobile ahead orders are approaching 20% of transactions, Brotman said. In Starbucks’ busiest 1,200 stores Mobile Order and Pay represents 7% of all transactions, he said.

Not only do customer’s benefit from a shorter line, but taking 20% of customers out of the line at a store’s peak time boosts employee efficiency as well, Brotman said.

“In those busiest stores at peak, Mobile Order and Pay is driving significant productivity and throughput,” said Scott Maw, Starbucks’ executive vice president and chief financial officer.

A few weeks ago, Starbucks added functionality into Mobile Order and Pay to allow consumers to redeem their loyalty rewards. In the future, the retailer will add new features to the program, including enabling consumers to select a favorite order and location.

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About 19 million consumers in the U.S. use the Starbucks app, Johnson said. More than 86% of Starbucks’ iPhone users and 79% of its Android users have already upgraded to the new version of the app that launched last week, he said.

Starbucks is also looking to expand its personalization marketing campaign to mobile devices.

Starbucks has mostly sent targeted communication via email, but the coffee shop chain wants to shift that more to mobile devices, and specifically recommendations in the mobile app, said Matthew Ryan, executive vice president and global chief strategy officer at Starbucks.

The emails offer bonus reward points to consumers if they purchase a certain item or make an additional visit to the store. Starbucks is looking to expand those campaigns to vary the content of those messages based on a customer’s previous orders, and communicate with consumers on their mobile device, Johnson said.

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“We can now send significantly improved targeted communications to individual customers based on what we know about their specific tastes and interests, enabling us to become even more relevant to them,” Johnson said. “Over time, we will expand this capability to a more robust mobile app-centric model that enables us at the very moment a customer orders to provide relevant suggestions and recommendations and, when appropriate, incentivized offers to delight our customers.”

 

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