Mobile Payment Apps: What to do When Your Biggest Win Creates Your Biggest Problem
“The best-laid plans of mice and men often go awry.”
This old line from the Robert Burns poem remains popular for a reason. And for those in technology-driven industries—particularly those who work in the Internet of Things (IoT) and mobile tech space—this sentiment can ring especially true. Because it’s not just changes in human behavior that can alter the course of a plan; it’s the unpredictable nature of the game.
In this series of blog articles, we’ll explore how a few rockstar businesses are tackling that challenge, leveraging connected, mobile solutions to level-up their customer experiences.
Why Mobile Matters
Mobile apps and on-demand services are rapidly changing the way “business as usual” happens across the world — infiltrating everything from our early-morning coffee runs to our banking habits and exercise routines. In 2017, the number of mobile app downloads came out to over 178 billion, or roughly 26 apps per person living on the planet.*
*Only 2.32 billion of the world’s 7.6 billion people have access to smartphones. Adjusted, that number reflects 85 app downloads for every smartphone user.
Personalized, convenient mobile experiences have become a vital part of our interaction with out favorite brands and services; and few companies can vouch for this truth with more conviction than Starbucks.
Unfortunately, the Starbucks team learned the hard way that an successful app is driven by more than solid backend code and a sleek interface. It’s driven by well-planned infrastructure that seamlessly connects a user’s mobile experience with their complete experience.
“Welcome to Starbucks! Here’s Your Order.”
Starbucks is an undisputed industry leader in coffee. And when the company launched its “Mobile Order & Pay” app in the fall of 2015, it became one of the most powerful players in mobile as well. The app service was designed to allow Starbucks Rewards members to place an order with just a few clicks via their mobile device. With this new payment shortcut, consumers could walk in, pick up their order, and be on their way out the door in seconds.
In theory, the system should have worked like a charm. Customer adoption of the mobile payment service was enthusiastic and widespread. But in busier locations, high order volumes from mobile devices meant long lines for in-store customers and general confusion for mobile users whose drinks weren’t prepared when they arrived.
The Waiting Game
Soon after the introduction of mobile ordering, large crowds of caffeine-deprived customers began to build up at pickup counters, waiting for their mobile orders. Brick-and-mortar stores weren’t equipped to absorb the steep influx of pickup customers, and long wait times wreaked havoc on customer service. Starbucks’ app usage dropped, and general sales took a temporary dive.
Transactions dropped 2% towards the end of 2016; in part because of problems caused by mobile ordering. Even with all of the careful planning that went into the app, the rollout was more or less chaotic. And rather than getting better, the customer experience was getting worse. As the company rounded the year mark into 2017, the Starbucks team knew it had to do something — and fast.
The Solution
The first change the coffee giant made was a small update to its physical stores. New, mobile-order pickup shelves spared baristas the trouble of calling out names for mobile customers who were still en route to the pickup location. Mobile-only baristas were also added to the staff lineup at busy times of the day, and the app was updated with push notifications, sent via text to notify customers when their orders were ready.
In early 2018 came Deployment 2.0 — described by Starbucks CFO, Scott Maw, as Starbucks' first national effort in roughly five years to determine how many employees should be working at different times of day and what exactly their tasks should be. In the following weeks, Starbucks again announced a change to their mobile app, this time expanding mobile ordering to all customers rather than just Starbucks Rewards members. The expanded offering has earned the company more than 6 million digitally-registered users since March, and because Starbucks customers tend to spend more on mobile transactions, this is great news on the sales front.
Lessons Learned
While the company’s initial app rollout was more or less a flop, Starbucks learned valuable lessons as an early player in mobile experience design. The coffee chain now offers one of the most robust mobile ordering platforms in the restaurant industry, and has seen real success as they have continued to adapt and evolve, adding a progressive web app to the mix in May of this year. The new PWA allows users to skip both the line and the download.
The takeaway? In an age of ever-changing consumer culture and technology norms, it can be nearly impossible to plan for everything. A digital rollout that looks great on paper often meets serious roadblocks in actual practice with actual customers. But with close monitoring of the full customer experience and quick response time, smart brands are implementing successful mobile solutions that help them win and keep customers. Chains like Panera have learned from Starbucks’ example, launching new digital platforms store by store to ensure a smooth transition.
Today, eMarketer data, predicts that 23.4 million people ages 14 and over will use the Starbucks app to make a point-of-sale purchase at least once every six months, making it the most popular payment app on the market. While a sizeable user base is a huge advantage, that level of adoption will bring continuous challenges. It will require Starbucks to stay on top of customer experience, new digital trends, and emerging channels to continue to dominate the space.