Case #5: Starbucks: Mobile App

Mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time

Starbucks was founded in 1971 and has  over 17,575 stores in over 55 countries, 62% which are located in the U.S.  With such a huge presence in the market, it’s no wonder they created a mobile app for both Android and iPhone devices.  This free app, which was released in December of 2010, makes the Starbucks experience faster and more convenient for customers.

Starbucks app for iPhones:

  • allows you to check your balance and reload your Starbucks Rewards Card
  • “Shake to Pay” gives you instant access to your card so you can save time in line
  • lets you track Stars and redeem rewards
  • gives you the option to leave a tip for your barista
  • allows you to scan your phone to pay instead of swiping your card
  • allows you to get Starbucks’ “free pick of the week”
  • allows you to save your customized drinks under “My Favorites”, so you don’t have to remember and can just show your barista your order
  • gives you directions to the nearest Starbucks, store hours and services offered

                                    

Starbucks app for Androids:

* Has similar, but not as many features as those offered iPhone app

  • allows you to pay for purchases with Starbucks Card
  • allows you to reload your Starbucks Card’s balance
  • tells you how many stars you have and when you can redeem your “My Starbucks Rewards”
  • gives you directions to nearby Starbucks, store hours, and services offered

                View your Rewards and Rewards history.           Reload your card, set up autopay and more.

My Starbucks Rewards

Starbucks customers can earn Stars when they use their Starbucks cards at any Starbucks, Teavana, Evolution Fresh, or La Boulange stores.  It works like a point system, so the more stars you earn, the better rewards you get.  People with active Starbucks Cards can get a free drink or treat and a 15% off coupon for their entire purchase on their Birthday.  They can also get exclusive offers through text or email if they register their accounts on the Starbucks website. There are two reward levels, green and gold, each offering different rewards.

   

     

Starbucks’ Target Audience

The target audience for this mobile app is any Starbucks customer with a mobile device. Young adults make the largest percentage of Starbucks’ customer base and this section has been growing at about 4.6% per year.  The coffee makes up about 75% of Starbucks’ revenue, but that percentage is expected to decrease with the increase in merchandise and availability of Starbucks products online and at other retail stores.  The following pie chart shows the percent of revenues generated by Starbucks customers: 

                  Image

The “other” category includes customers over 40 years of age.  As you can see, this chart shows that a mobile app is perfect for Starbucks because 90% of their revenue comes from customers aged 18-40, who most likely own Androids or iPhones.

Starbucks uses Square Wallet app:

Starbucks uses Square Wallet, which basically makes your phone a wallet.  All the customer has to do is place their order, open the Square Wallet app and click Starbucks, and scan your phone.  Credit and debit card information is saved onto the app

Customer Reviews:

Although this app has been created to make the Starbucks experience more convenient, some customers have found it to be quite a hassle and lacking information about the products that are important to them. Here are some app reviews from the iTunes website:

“New app upgrade is a bunch of crap. First off it doesn’t keep my login info and half the time my password doesn’t even work… Second you removed the easy to access nutritional information and the easy store locator… Also a little concerned about the shake to pay – as it doesn’t work – and now instead of one click to pay it’s three… and why leave my transaction open for two hours for adding a tip – more and more security concerns”

                                                                  – by SomethingCreativeHere

“The new (app) is great, and is a HUGE improvement over the previous, clunky design.  (There’s no need for a menu), there’s a menu there, you can even, you know, talk to the baristas. They are actually pretty nice and knowledgeable. “

                                                                  – by Gan7114

Effectiveness of the app:

The app can be very profitable for Starbucks because it follows the sharing model, which allows anyone with an Android or iPhone device to download it, and the company doesn’t have to pay any fees because it relies on its customers’ bandwith network.  Although there are mixed reviews about the app, I think the star system and overall benefits are great for Starbucks customers.  I’m not a coffee drinker, but if I was I’m sure I’d appreciate a free cup on my birthday and other benefits for being a loyal customer because I’d be more encouraged to continue to spend my money there.  However, I do believe that the payment system has some security issues and is not any more convenient than just pulling out your credit/debit card.  I think there should be some form of human interaction and not just flash the barista with your iPhone that already saved your order, and scan your phone to pay… Starbucks is all about creating a warm environment, and it would definitely be tainted with if everything is replaced by technology.

Sources:

http://www.statisticbrain.com/starbucks-company-statistics/

http://www.starbucks.com/coffeehouse/mobile-apps

https://itunes.apple.com/us/app/starbucks/id331177714?mt=8

http://smallbusiness.chron.com/starbucks-target-audience-10553.html

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