Imagine you’re on your way to work. You walk up the stairs from the subway, and your coffee order is put in automatically. You walk into Starbucks, past the line, tell the barista your name, and she hands you your tall latte with skim.
This is the future of buying your morning coffee with the newly updated Starbucks mobile app. Today, a pilot program to buy coffee by iPhone launched in Portland, Oregon, which will allow you to buy coffee without standing in line to order or handing a cashier your phone to pay. And over the next year, the app (on Android soon) will see a series of updates, including the option to set a daily coffee order, or even use geofencing to automatically place your coffee order at the perfect time during your morning commute. It's part of a larger trend in fast food to move ordering from queues to pocketable apps—and it's a challenge fraught with unforeseen perils that extend beyond sleek interfaces into store operations themselves.
For Portland’s Starbucks users, the updated app remains mostly the same as the old Starbucks app, except it has a new tab for ordering. (If you don’t live in Portland, that tab will read "menu.") Click on the tab, and you’re brought to a screen. Up top, in a big image, you’ll see your last order. In three taps, or roughly five seconds, you can order it again from your nearest store. Dig deeper, and you can search for local Starbucks stores via integrated Google Maps, see their respective wait times on drinks, dig through their menus, and create a custom drink to order.
For the average Starbucks addict, the update sounds like a godsend. Today, 16% of all of U.S. Starbucks purchases are made with the existing mobile app, which requires users to stand in that elbowy line, then hand the cashier their phone (that generates a QR code that’s scanned to actually pay).
"You’re physically taking a person out of the line, which is going to reduce stress and reduce line time," says Adam Brotman, chief digital officer for Starbucks (the same guy who brought us the company's free Wi-Fi). "It’s also going to open up free time for [baristas] to help at the pinch point in the line, make drinks, and engage with customers."
On the corporate end, the app opens different avenues for increasing profitability. For one, Starbucks anticipates app usage will grow from that 16% figure (how much, the company would not say). Couple more users with the fact that you can’t use a Visa or Mastercard in the Starbucks app. You have to pay with refillable loyalty cards—the highly lucrative system that 33% of Starbucks customers are already using. At the most superficial level, recharging a card with fewer large sums allows Starbucks to save on transaction fees via fewer single-coffee credit card payments. Starbucks coaxes more of the world to buy coffee in the most profitable way possible.
Brotman reveals other ways Starbucks will likely cash in from the system. The map, for instance, will display wait times for orders of every Starbucks in an area. A customer who might have avoided a morning coffee because of a long line will now see a convenient alternative, and Starbucks saves the sale. On top of that, Brotman believes that line anxiety is eating into sales. So it stands to reason that customers who can peruse food offerings casually on their phone, rather than mentally rehearsing "Venti soy Frappuccino with a double shot" to avoid holding up a line, will be more likely to place an order and even order more.
Introducing new payment schemes at scale is remarkably difficult. During the development phase, one major problem the team encountered was: Where are baristas going to set all of these mobile-ordered drinks in an already tight working arrangement? The normal pickup area wasn’t right—after all, it could create a pileup for those ordering in the store. So instead, designers went store by store, to each location in Portland, to carve out spots. Whether or not these spots work they’ll know soon enough—one of many reasons the app is being rolled out in a single city first.
"Most of the things we do in digital, they have some effect on operations," Brotman says. "But this is the project that’s part of operations. This is operators fully integrating mobile ordering into their routines."
The new app is out for iOS today and is coming to Android soon. Mobile pay will roll out across U.S. cities through 2015.