Mobile Marketing: A Case Study of Starbucks Mobile Order & Pay

Poon Lok Yi, Joyce

Student ID: 1155082158

Social Media Marketing (SMM) refers to the process of gaining traffic and audience’ attention on a brand’s website, product or service through the social media platforms in various digital devices such as smartphones, tablets and desktop. By gaining the audience’ attention or awareness on a brand through different social media platforms, the ultimate goal of SMM is to drive conversion such as increase the sales volume, lead generation as well as brand awareness.  Recently, most of the research show that social media networks are increasingly being accessed through mobile devices. According to a research, over 4 billion of the populations are the smartphones users while there are over 5.6 million of the users are in Hong Kong, accounting 64% of the total population among the city. (Statista, 2015)

Smartphones become an everyday tool for citizens in Hong Kong. A study found that nearly 7 in 10 Hong Kong citizens use smartphones while 83% went online using a smartphone at least once a day. A high level of mobile internet usage is also emerged in Hong Kong. It found that 48% of internet users used smartphones more often than computers or tablets to access the internet. (eMarketer, 2017) Due to the incredible amount of mobile subscribers, many companies tend to leverage mobile marketing to promote their products or even let the customers to place their orders in the mobile platforms in order to encourage the customers to act and response instantly via their mobile devices.  In 2015, over HK$17.8 billion of sales has been generated via m-commerce in Hong Kong. (Go-Globe, 2015) The incredible of sales volume has led the mobile marketing become more crucial in the social media networks.

In the following sections, I will use Starbucks Mobile Order & Pay as a case study to portray its success in the mobile marketing.

Starbucks “Mobile Order & Pay”:

Currently, over 240,000 active users in Hong Kong are the loyalty member of the Starbucks apps, whereas among 60% of the users pay the food and beverage via the cashless payment with the app. In this month, Starbucks has rolled out the new app features called “Mobile Order & Pay” across its 176 physical stores among Hong Kong and Macau in the early of March whereas this new feature has already launched in US in September 2015. This new function mainly allows customers to place their coffee and food order and choose the store nearby to pick up their coffee via the location-based service before reaching the store.

Goal:

Most of the people are likely to grab a coffee before they go to work. But what makes they feel desperate is when they see a long line, sometimes they turned around and walked back out the door.  Some of them will even just go away because of the long queue. To tackle this problem, Starbucks has rolled out this Mobile Order & Pay feature in their app.  The main objectives of developing this feature is to increase customer traffic through quicker service and avoid instances of customers walking away without placing an order due to long lines and wait times. It is estimated that this new feature of the app can able to save the average coffee drinker 10 to 15 minutes a day to wait for their drinks.

Result:

The Mobile Order & Pay has boosted the company’s sales growth among the European countries as well as in Hong Kong. There are over one million of customers made a mobile order-ahead payment in 2016 and it has comprised 6% of the total sales in the quarter and 7% in September 2016. Besides, some store locations also recorded a 20% of orders during the peak hours via the mobile order-ahead. The result also shown that customers made an average of five purchases via the mobile order payment per month. (Geekwire, 2016)

In Hong Kong, 2% of all orders are not being placed via the mobile ordering, with its busiest store clicking in 6% of all transactions via the new feature. (SCMP, 2015)

This implies that customers are feel comfortable and willing to place the order in-app. Starbucks also noted that mobile order-ahead leads to increased productivity in stores, which helps improve the efficiency.

Challenge:

However, the new system has encountered another challenge in which it has created a new queue. Since there are many customers are using this new features to order in advance and pick up their drinks directly in the stores. It has led many customers pick up their drinks in the pick-up counters and cause congestion in the stores especially during the peak hours. In my opinion, I suggest Starbucks should add-in a function in the system in which text the customers when the drinks are ready and also staffing barista counters with additional employees during rush hours. One of the aims of the Mobile Order & Pay is to save customers’ waiting time. Hence, Starbucks should take an immediate actions to tackle this problem of congestion in the pick-up counter.

Recommendations:

As personalization is also one of the important marketing tactics to promote a company’s brand and let the customers to be more loyal to the brand. Hence,  I suggest Starbucks can add the personalization elements that allow the app to recall and save the customers’ favorite order and suggest what might pair well with it. For example, if a customer like to drink Espresso, the app can recommend him to also have a piece of lemon tart. 

Besides, as chat bot is becoming more popular in the social platforms, I suggest the the app can also include the chatbot with A.I. technology in which customers can tell about their needs and the bot can suggest some foods and beverage based on the customers’ preference in the chatbox in order to make it more personalized and increase customers’ interaction within the app. Starbucks has proposed this feature and plan to roll out in this summer and I think this new feature might bring a significant breakthrough among the mobile marketing.  

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Reference:

·       eMarketer (2017). Nearly Seven in 10 Hong Kong Residents Use Smartphones. Retrieved from: https://www.emarketer.com/Article/Nearly-Seven-10-Hong-Kong-Residents-Use-Smartphones/1014941.

·       Go-Globe (2015). E-Commece in Hong Kong – Statistics and Trends. Retrieved from: http://www.go-globe.hk/blog/ecommerce-hong-kong/

·       Geekwire (2016). Coffee from a chatbot: Starbucks unveils ‘My Starbucks Barista’ AI technology for mobile order. Retrieved from http://www.geekwire.com/2016/coffee-chatbot-starbucks-unveil-starbucks-barista-ai-technology-placing-mobile-orders/

·       Statista (2015). Number of smartphone users in Hong Kong from 2015 to 2021 (in millions)*. Retrieved from: https://www.statista.com/statistics/494594/smartphone-users-in-hong-kong/

·       SCMP (2015). Starbucks promises coffee delivered to your doorstep. Retrieved from: http://www.scmp.com/business/companies/article/2080274/starbucks-promises-coffee-delivered-your-doorstep

·       Social Media Usage in Hong Kong – Statistics and Trends (May, 2015). Retrieved from: http://www.go-globe.hk/blog/social-media-hong-kong/