Dec 6 2012
Basis Team

Orange. Mobile. Frappuccino!


At 8:45AM on November 1st I arrived at the office, booted up my computer and heard a coworker loudly broadcast “The Starbucks Holiday Cups Are Back!!”

Ah yes, it’s the time of the year when the lines at Starbucks rival those of an Apple Store.  With both a Starbucks cup and iPhone already at hand, I realized that there are few things more integral to my morning routine than my smartphone and a morning cup of coffee (okay, okay…and a shower).

Both are highly personal, very customizable, and it’s hard to imagine a day without them.  Having chosen to focus innovation around all things mobile, Starbucks has managed to capitalize on this insight and now completes over two million mobile transactions per week!  Sure, Starbucks has executed innovative mobile advertising campaigns, but it’s the strategy of making mobile the center of the marketing strategy that sets them apart from the competition.

In 2011, Starbucks updated the functionality of its mobile application (originally launched in 2009) in order to give their customers the ability to pay at the register with their phone.  The process was smooth.   Baristas were well prepared for the experience, and customers simply waived a bar code on their phone’s screen in front of a scanner.  Perhaps more importantly, the process also helped drive sales for Starbucks.  Some have pointed out that the application can make store lines move 10 percent to 20 percent faster during peak hours.

In 2012, Starbucks made additional strides to improve the payment experience by working with outside partners such as Square and Apple (among others).  For example, when Apple released its Passbook application, Starbucks was one of Apple’s first partners.  Using Passbook, customers plug in their favorite Starbucks location(s) and the application automatically recognizes when the customer enters a store.  Rather than digging through your phone’s applications to find the Starbucks app, Passbook gives customers the ability to swipe the home screen (even when locked) and load the barcode for payment.  It’s extremely convenient.

Additionally, Starbucks doubled down on mobile payments by investing $25MM in the mobile startup Square.  The partnership and investment allows Starbucks to save on transaction fees and provides customers the flexibility of being able to pay using the Square application.  Starbucks will utilize its massive retail footprint (launching square across 7,000 locations) to drive a strong return on its $25MM investment and propel Square into the mainstream.

Simply put, Starbucks is preparing for a mobile first future. By testing mobile advertising, developing best-in-class mobile applications and driving innovation within mCommerce, Starbucks is making mobile an integral part of its marketing mix entering 2013.

Advertisers and marketers who don’t invest in or take risks to prepare for the changes that mobile will bring in 2013 have been put on notice.

Read more about how Starbucks is crafting it’s mobile first strategy: