Retail TouchPoints: Starbucks, Disney and Guess Up The Ante With Mobile

Discussion
Jan 26, 2011

Through a special arrangement, presented here for discussion
is a summary of a current article from the Retail TouchPoints website.

Starbucks
announced last week the launch of mobile payment in its 6,800 U.S. company-operated
stores and more than 1,000 Starbucks located in Target locations. Customers
can purchase items in-store with select smartphones as part of the national
program, which builds on the introduction of the Starbucks Card Mobile application.

The
new application allows customers to manage a Starbucks Card account, check
balances, reload a card and check reward status. To make a purchase, shoppers
hold the mobile device in front of a scanner on the countertop and scan the Starbucks
Card Mobile App’s on-screen barcode.

"Today, one in five Starbucks
transactions is made using a Starbucks Card and mobile payment will extend
the way our customers experience and use their Starbucks Card," said
Brady Brewer, VP Starbucks Card and Brand Loyalty, in a press release. "With
mobile payment, the Starbucks Card platform further elevates the customer experience
by delivering convenience, rewarding loyalty, and continuing to build an emotional
connection with our customers."

Customers loaded more than $1.5 billion
on Starbucks Cards in 2010, an increase of 21 percent over 2009, driven in
part by the My Starbucks Rewards program.

The news of Starbucks’ rollout
was announced just two weeks after the National Retail Federation’s (NRF)
annual convention in New York, where mobile payment was a key topic of discussion.

Other
mobile payment news:


  • Usablenet has integrated with PayPal’s mobile payments product, Mobile
    Express Checkout, to enhance payment offerings on clients’ mobile web
    sites. Usablenet can now optimally extend PayPal’s Mobile Express Checkout
    to mobile commerce web sites and other supported solutions, such as mobile
    applications, tablets, Facebook and other social media, as well as in-store
    kiosks.
  • Newly-revamped Disney Stores are leveraging Oracle technology to facilitate
    mobile sales via Apple iPod Touch devices and portable printers. Store associates
    can look up products, print gift receipts and suspend the transaction if
    the customer needs to complete it at the traditional point of sale. During
    the holiday season, in the 40 stores that implemented mobile POS, mobile
    sales accounted for 15-18 percent of total sales. Disney expects to have
    140 of the 200 U.S. stores outfitted with mobile POS by the 2011 holiday
    season.
  • Guess has implemented Global Bay’s mobile retail software to roll
    out mobile payment capability throughout its more than 1,100-store chain
    within the next 3-6 months. EVP and CIO Michael Relich at the NRF show said
    the effort aligns well with the Guess brand identity, and that customers "absolutely
    love" the convenience factor. "From a brand point of view I think
    it is kind of cool," he said. "We’re supposed to be a cool
    brand and having cool technology [in our stores] helps."

Mobile payment is expected to grow to $633 billion annually by 2014, with
490 million customers using smartphones for payment, according to Generator
Research.

Discussion Questions: What do you think of Starbucks mobile payment option, especially its link to its loyalty program? What are the benefits of stores driving mobile payments versus credit card companies or cell phone providers?

Please practice The RetailWire Golden Rule when submitting your comments.

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13 Comments on "Retail TouchPoints: Starbucks, Disney and Guess Up The Ante With Mobile"


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David Biernbaum
Guest
10 years 3 months ago

With mobile payment expected to grow to $633 billion annually by 2014, the Starbucks mobile payment system is just a prelude of much more to come. However, what makes Starbucks so special is the tie-in with the loyalty card for a product that is truly a way of life and a routine for so many consumers, and also because once again Starbucks is ahead of the game. This is a company that knows its market and its full market potential.

Max Goldberg
Guest
10 years 3 months ago

It’s all about who stores the balance and who collects the data. Retailers that offer their own mobile payment apps get the float on the balance in customer accounts and they own the data recorded during the transaction.

It makes sense to move to mobile payments, even if a retailer does not want to develop their own app. How many loyalty cards and fobs will a consumer carry? If all of this information can be carried securely in a mobile phone, it’s easier for the consumer and the retailer. If retailers can realize lower processing fees through mobile apps, they make more profit on each transaction.

We’re seeing the birth of new payment systems that will shake up payments the way that credit cards disrupted the system of cash payments.

Paul R. Schottmiller
Guest
Paul R. Schottmiller
10 years 3 months ago

One less card to carry around and the ability to manage loyalty in some cases is certainly a step in the right direction.

Future applications coupling mobile payment with the scanning and on-line access capabilities on the phone will be a more exciting innovation that will:

(1) Significantly reduce checkout times

(2) Handle split orders (eCom and in-store) easily as the assortment becomes increasingly defined as totality of product across channels vs. just store stock.

David Dorf
Guest
10 years 3 months ago

Stored value systems are not new, but mobile phones have added an additional level of convenience for consumers. This is especially true in the quick-serve environment, so I would not be surprised to see some of the fast-food chains introduce similar programs. The Starbucks mobile app has all the features one would expect, so it will be the model to follow.

Regarding mobile POS, Disney and Limited Brands are rolling iTouch based solutions to their stores after successful pilots. Not only do the devices provide extra registers to speed checkouts, they are also inexpensive and very easy to use. There are several other retailers planning to follow suit this year.

These mobile devices are positively impacting retail for both consumers and employees.

Dan Berthiaume
Guest
Dan Berthiaume
10 years 3 months ago

This is a great move on the part of Starbucks and exactly the kind of forward-thinking marketing strategy more retailers should embrace. Mobile is inevitably going to be a major retail channel, and as Starbucks customers tend to be wealthier and more tech-savvy than average consumers, it makes sense for Starbucks to take a leading position in the mobile commerce/marketing arena. Good for them.

James Tenser
Guest
10 years 3 months ago
While an interesting innovation, these early mobile payment efforts from Starbucks and Guess will be short-lived. Expect them (and most other mobile payment and wallet apps that require POS scanning of the phone screen) to be swept aside as soon as NFC-enabled handsets arrive. Oh – did I mention they are already arriving? The first NFC-enabled device in the U.S., the Samsung Nexus S, was announced by Google last December. While its functions are limited now by the Android operating system, many competing handsets are expected over coming months. In fact, the NFC chip will be virtually ubiquitous in smartphones by next year. NFC stands for near-field communications, a radio-wave technology already widely used in Europe, Australia and parts of Asia to allow personal mobile devices to exchange data with retailers and even vending machines. If you have a contactless “tap and pay” credit card like Visa PayWave, MasterCard PayPass or a key fob like the old Mobil SpeedPass, you’re already familiar with NFC payments. With stored-value technology, NFC supports very powerful and versatile electronic… Read more »
Liz Crawford
Guest
10 years 3 months ago

This is the beginning of the end of standing in a checkout line.

Modiv media is launching an app that allows shoppers to scan the items in their baskets (especially good for grocery environments) onto a running tally. Imagine that the cellphone could be used to pay and verify payment. In this scenario, where’s the need for the checkout line?

I believe there was an innovation at the NRF show this month where a kind of tunnel was used to scan and check out numerous items at once, in order to speed checkout lines. Mobile scan and payment apps could make that kind of system a footnote to history.

Phil Rubin
Guest
10 years 3 months ago
Starbucks is back in the forefront of things again when it comes to loyalty and payments. There is TREMENDOUS value here for Starbucks, its customers and even its marketing/payment partners like Target (we’re expecting this is only the beginning). The only drawback here, and it’s nothing new, is that any form of payment other than cash limits the tips that Starbucks baristas (store employees) get. There is a flip-side to this however which is noted below. Customers Win: Customers are already using their cards at a greater rate than just about anyone when it comes to reloadable debit/gift cards. It’s easy, convenient and further automates their Starbucks habit. The integration with the SBUX loyalty proposition is a best practice and it remains puzzling why more merchants haven’t done this with their gift/debit cards (Nordstrom is among the minority with its MOD card among non-restaurants). The utility for customers of acceptance at Target and even more ancillary benefits like Coinstar are icing on the cake. Starbucks Wins: Any time you can get a customer to pay… Read more »
Jonathan Marek
Guest
10 years 3 months ago

There are very few stores that could pull this off. After all, as a consumer, I’m not going to have a different app for every store I shop.

Starbucks, of course, is one that could pull this off, given their customer base, frequency of visits, and the existing card program. It will be interesting to see if they can expand this as a payment method.

Ed Rosenbaum
Guest
10 years 3 months ago

Starbucks was cutting edge when they began selling coffee for outrageous sums. The customer base has always been cutting-edge-technology-trained people. This will be an exciting and interesting effort. There will be glitches. Those glitches will lead to upgraded models and improved apps making this something more retailers and grocers will grab onto. The future is here again; and it begins with an overly expensive cup of coffee.

Mark Burr
Guest
10 years 3 months ago

“Apps,” unheard of by many just 2-3 years ago, now number in the billions. Payment is only one area of beyond dramatic change. It’s only the beginning of ‘life tools’ we haven’t imagined yet. I fear my money clip will end up in the valet on the dresser aside my pocket watch and the buttons I saved off of my white vested suit.

Aaron Greenspan
Guest
Aaron Greenspan
10 years 3 months ago

Here at Think (we run the FaceCash payment network) we think the Starbucks rollout is definitely a sign of things to come. Barcodes are presently much less expensive to read than NFC chips, and that is likely to be the case far into the future. Fortunately, our system is built on the premise that it doesn’t matter which handshake technology prevails. We can process payments either way.

Bill Hanifin
Guest
10 years 3 months ago

To split some hairs, I would not put the Disney and Guess initiatives in the same category as Starbucks.

The former two retailers are deploying portable payment solutions in their own stores, similar to the way Apple has been accepting payment for some time. This is convenient and adds some flair to the customer shopping experience, but when I think of mobile payment, I think of being able to use my handset as a payment device.

As for Starbucks, my informal poll among friends has them petrified that they will, now more easily than ever, be draining their accounts to pay for coffee and related treats. I think it is going to be a success!

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