Friday, March 13, 2015

Starbuck's Code Halos and Mobile App Strategies

Starbuck's
Starbuck's is expanding the roll-out of their mobile ordering, loyalty and payment app.   This is one of the most interesting mobile apps from a major retailer that I have seen.  Before I summarize the key features and benefits, let me share the purpose of Starbuck's latest roll-out according to The Seattle Times' Angel Gonzauez,"...to draw more customers into a digital ecosystem that is closely entwined with its rewards program, whose users tend to buy more, and more often."  This is part of their plan to double revenue to $30 billion by 2019.

Key points:

  • Users of the app will be able to order and pay remotely - without being in the store.  No lines to stand in.
  • The mobile app user can see, in real-time, how busy each store is (based on real-time POS data and mobile order volumes), and an estimate as to how long each store would take to deliver the order, and how long it would take you to walk or drive there.  The user can then select a store to fulfill their order based on all this real-time data.
  • Your order will be waiting for you and labeled correctly (matching mobile app order and your name as spelled in your loyalty program account) when you arrive.
  • The mobile app is integrated with the loyalty program and free drinks are accumulated.
  • Orders will be waiting for the user when they arrive and packaged for travel.
  • Starbuck's has found that consumers order more products when they have more time to review menus and research the offers (and look at the delicious pictures).
  • Starbucks anticipates this will benefit their expanding menus and lunch offerings.

Starbuck's Chief Digital Officer Adam Brotman said the results from early pilots of this program in Portland, Oregon surpassed all expectations for efficiency and customer satisfaction.

Embedded Sensors and Real Time POS
I love their use and analysis of real-time POS and online ordering levels, time, location and distance to deliver the optimal value to the mobile user.  They combine the use of sensors (IoT) embedded in the iPhone, plus the real-time ordering and system data, and loyalty program data to deliver the very best user experience personalized for each individual customer.  At Cognizant we call this kind of implementation Code Halos strategies.  This is where I am spending most of my research time in 2015.

This is an example of the future.  We must ask ourselves if our current IT environment can support this level of real-time customer interaction and hyper-personalization of the user experience.  If not, then we had better start working because this is where the competitive landscape of the future will be located.

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Kevin Benedict
Writer, Speaker, Senior Analyst
Digital Transformation, EBA, Center for the Future of Work Cognizant
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***Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I am a mobility and digital transformation analyst, consultant and writer. I work with and have worked with many of the companies mentioned in my articles.