Interview: Starbucks brewing up new in-store services

One month on from the deployment of wireless phone charging hotspots in ten of its London coffee shops, Starbucks is seeing encouraging usage figures from the new service and looking ahead to future innovations.

IT director for Starbucks EMEA, Robert Teagle, told Essential Retail that feedback from customers both online and in stores has been positive, with data showing that the terminals are being used "above and beyond expectations".

The charging hotspots placed on tables in the coffee chain's stores have built-in Duracell Powermat wireless charging technology. Customers who wish to charge their phone batteries must collect a 'ring' at till point, which is placed on the device and generates the wireless connection.

The data gleaned from the trial shows there have been lots of 30-minute-or-less charges, but apart from power-related stats there is no extra information Starbucks can take from the system to learn about its customers' behaviour – for now.

"The technology is relatively new; it's only been in the US for a number of months and we're learning about it," Teagle explained.

"Where could it go? There are many different ways it could go in terms if the iteration of the technology."

Teagle did not go into detail, but at a recent industry event in London he speculated about a future where phones might be charged via Wi-Fi which, if it did manifest itself, may give the business an opportunity to engage further with its customers and learn more about their behaviour.

This kind of thinking is just one example of the culture of innovation that seems prevalent across the Starbucks business.

The US-based coffee chain has been one of the first retail organisations to capitalise on the potential of mobile payments, with figures from its most recent trading statement indicating that it has 13 million mobile app users in the US alone. On average, more than seven million mobile transactions are taking place in Starbucks stores each week, representing 16% of total tender and involving the vast majority of the business's nine million reward member customers.

In the UK, Starbucks has around 1.8 million My Starbucks Reward customers, who have the option of paying for their purchases via their smartphone app.

Teagle remarked: "We launched an app five or six years ago without it being tied to anything of value such as loyalty. It was a nice shop window but it didn't really drive our business.

"We learnt quickly we had to do something with the app that wasn't only good for us but also beneficial to our customers, so tying it to the loyalty programme was really what drove the success of the app and consequently what drove the success of the mobile piece. The payment side of things mirrors the functionality from the loyalty programme in the app."

The IT boss acknowledged that the success of the app and loyalty scheme has coincided with a growing confidence in mobile payment among consumers, which has resulted in the emergence of a number of m-payment specialist companies looking to introduce their technology to multiple retail partners.

Teagle did not rule out working with companies of this nature in the future, but said the key goal for Starbucks is to provide its customers with a convenient tool they trust and are comfortable using.

"Tying it with loyalty is our unique selling point," he said.

"In five years' time I'm sure there'll be some convergence [between in-house payments apps and wider industry players]. For sure there'll be some movement away from in-house over time, but we don't have any plans at the moment to change what we are doing."

One change that could soon filter into Starbucks' offering is 'mobile order and pay', which is being trialled by the company in Portland, Oregon. The concept of this strategy is to speed up service and allow customers to order ahead before entering the store, and Teagle describes it as Starbucks' "omnichannel development".

"It's all built up around the concept – particularly in the US but to an extent in the UK, too – of consumers' changing purchasing habits," he noted.

"If consumers are spending less time visiting bricks and mortar retail stores and buying online, then by definition people are going out less and will not come to our stores as much. We have to make a compelling case for consumers to come to our stores and offer them propositions which make it as easy as possible to visit us and enjoy our products."

He added: "I think mobile order and pay is a very compelling case for us moving forwards. It will fulfil a demand, it moves us into a different place and it has customers thinking about us in a new way."

Whether it is wireless charging hotspots, mobile payments or mobile order and pay, it seems the majority of tech innovation is driven from the US and then distilled to other regions.

Teagle agrees, saying that the EMEA arm of the business lets the US "do the thinking" because it has "armies of people" working on new projects, before taking the technology and working out how it can be deployed differently across its own markets. However, the IT director suggests there could be some EMEA-driven innovations coming later this year.

"We have increasingly been thinking about what's different about the EMEA consumer and general landscape which means we should do things differently to the US," he explained.

"Whether it's drinks, food or other products, around the business we are thinking about our consumers differently. There is more energy around this than at any time since I've been at Starbucks, so I think you'll see more of it coming. At the moment we're leveraging as much as we can from the US because they've got the resources."

Starbucks announced this week that it is launching its Evenings Programme in the UK, following a popular launch in the US. Its newly renovated Stansted Airport store is the first British site to offer the service, which offers a range of meals and shareable hot and cold snacks with premium wines and beers.

Similar to the US, the UK Evenings Programme is expected to be rolled out to further stores across the country.

In the coming months, however, Teagle is keen to bring his team's ideas to the table – and introduce some EMEA-led innovation to the Starbucks global enterprise.

Visitors to this year's RBTE, which takes place at London's Olympia between 10-11 March 2015, have an opportunity to hear from Robert Teagle.

The Starbucks EMEA IT director will be presenting a session entitled 'Increasing Transaction Speed And Customer Loyalty Through Integrating Mobile Payments Into Your Loyalty Strategy' on 11 March at 10:10.

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