Almost a quarter of all transactions at Starbucks stores in the US are mobile orders through the company’s app, an earnings document revealed yesterday. Ordering ahead through the Starbucks app is the company’s suggested way to get in and out of its locations faster during the pandemic, hopefully making it easier to maintain social distancing in the process.
Starbucks launched “Mobile Order & Pay” in 2015, combining the company’s existing payment system with new online ordering features that let you order ahead for pickup at stores. This week’s new stats show how popular that feature has become, slowly growing over time until it dramatically increased over the course of 2020 — from 17 percent at the end of last year all the way to 24 percent of US retail orders last quarter.
Starbucks’ mobile orders as % of transactions:
Q4 2020 24%
Q3 2020 22%
Q2 2020 18%
Q1 2020 17%
Q4 2019 16%
Q3 2019 16%
Q2 2019 15%
Q1 2019 15%
Q4 2018 14%
Q3 2018 13%
Q2 2018 12%
Q1 2018 11%
Q4 2017 10%
Q3 2017 9%
Q2 2017 8%
Q1 2017 7%
Q4 2016 6%
Q3 2016 5%
Q2 2016 4%
Q1 2016 3%
— Jon Erlichman (@JonErlichman) October 29, 2020
Mobile orders are the latest entry in Starbucks’ aggressive push onto phones, a project that started in earnest with the wide launch of mobile payments and the company’s app in 2011. The move quickly proved successful: by 2013, mobile payments made up 10 percent of the company’s transactions in the US.
Starbucks’ mobile payments have been so popular, they even beat out general purpose mobile payment systems. Research conducted by eMarketer in 2018 showed the Starbucks app was the most popular in-person or “proximity” mobile payment method overall, with 23 million people in the US making purchases at least once every six months. This surpassed Google and Apple’s own mobile payment options at the time:
the top payments app isn’t Apple Pay or Google Pay… it’s Starbucks. eMarketer says the ranking will remain unchanged through 2022.
This year over 23M people will use the Starbucks app to make point of sale purchase at least once every six months. pic.twitter.com/gOE95KuZer
— Sally Shin (@sallyshin) May 22, 2018
Growth in delivery and mobile ordering seems to be connected to COVID-19 and the increased viability of online ordering and delivery overall during the pandemic. Pew Research Center in April found that “Roughly a third of Americans living in urban (35%) and suburban (36%) areas say they have ordered from a local restaurant online or through an app because of the outbreak”.
Drive-thrus and mobile orders turn Starbucks into a fast food experience that’s a little different from the company’s traditional “Third Place” approach, but now that the interiors of stores are limited or closed during the pandemic, these features are vital to the company’s survival.
In Starbucks’ Q3 earnings call, Kevin Johnson, the company’s CEO, said that COVID-19 validated the company’s long-term plans around drive-thrus, contactless pickups and deliveries. This growth in mobile orders several months later seems to be further confirmation of COVID-19’s effects on the business and Starbucks’ ability to adapt to them.
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