Nine months after launching order ahead in just one market, Starbucks says they are accelerating the roll out of the mobile service after seeing significantly more transactions in stores where it is live.
The service, which allows customers to buy a cup of coffee from their phone before entering the store, initially launched in Portland back in December, but is now live in more than 4,000 of its cafes across 21 states.
Previously, it had expected to be in all 7,500 cafes by the end of the year, but now, it says it will have all company-owned stores up and running by the end of September. This includes big markets, like New York. In addition, it’s saying the Android app will finally launch this month, which will significantly expand the service to about half of its mobile customers.
At a Goldman Sachs conference in New York last week, Starbucks CFO Scott Maw told the crowd: “We’re accelerating the Mobile Order & Pay roll out, and will have all company owned stores rolled out by the end of this month,” according to a SeekingAlpha transcript. “We have a winner and it’s running ahead of our expectations.”
Starbucks has yet to release any sales figures as to how the service is performing, but separately, David Palmer, an analyst with RBC Capital, says there’s a “strong indication of the rapid adoption” of the service, reports Investor’s Business Daily.
According to Palmer, the feature accounts for “almost two-thirds of mobile payment mix” in the Pacific Northwest, where it’s been live since March. That’s impressive given the overall adoption of mobile payments at the Seattle coffee giant, which he estimated accounted for more than a fifth of Starbucks‘ August sales.
Maw said Order Ahead is having a big impact, with each leg of the roll out doing better than the last. The Pacific Northwest, including Seattle performed better than Portland, and the 4,000 stores turned on in June across the Midwest, outperformed Seattle. “We’re seeing significantly more incrementality and significantly more transactions from a Mobile Order & Pay,” he said.
With mobile Order & Pay, Starbucks can shift some of the labor that was once needed for the cash register to the coffee makers. “We’re taking away some of the pinch point at the POS…and we’re moving more customers through and we’re driving incrementality.”
In other words, the service is leading to more coffee sales, which has always been the goal.
Next up in Starbucks’ tech arsenal: Delivery. It will be launching two pilot programs later this year, including one in Seattle through a partnership with Postmates, and another in New York, with baristas hand-delivering orders to clients who work in the same building.
