The huge success of the Starbucks new mobile order app has already gained legendary status. Fact is Starbucks generates a healthy percentage of its sales because of its new mobile order and loyalty app. Customers love it and Starbucks loves it. Second Cup has recently launched their own loyalty program and will certainly also find that consumers are motivated by the overwhelming convenience, control of the sale and rewards they receive through their loyalty program.
Howard Schultz of Starbucks said it best:
“No single competency is enabling us to elevate the Starbucks brand more than our global leadership in mobile, digital, and loyalty. Starbucks is a clear leader in mobile payments and we are encouraged by how consumers have embraced mobile apps as a way to pay.”– Howard Schultz, 2013
Given that there are Starbucks, Second Cups, Tim Hortons, Dunkin Donuts, McCafe’s, Dutch Brothers and other chains selling coffee everywhere across this country, how exactly can independent coffee shops attract customers and keep them coming back.
A few harrowing statistics to ponder about Starbucks mobile app success
Mobile Order & Pay has the greatest impact at Starbucks’ busiest stores. Order-ahead transactions have lifted sales by the highest margin at busy stores. Starbucks has already been able to handle the increased activity by using revenues from Mobile Order & Pay to hire additional staff. In addition, the mobile service has reduced friction at the point-of-sale, leading to greater efficiency among existing staff.
The average ticket size for Mobile Order & Pay is comparable to My Starbucks Rewards (MSR) member ticket size at stores countrywide. Maw hopes average order-ahead ticket sizes will rise as Starbucks unveils a new advertising platform that will suggest food items in real-time as customers are ordering drinks in the app. This purchasing format could help Mobile Order & Pay become a significant part of Starbucks’ business.
Mobile Order & Pay builds on Starbucks’ mobile strategy. Starbucks already has a robust mobile payments ecosystem, processing 9 million mobile transactions per week in US stores, representing 20% of in-store transactions in Q3 2016. The company has already proven it can build effective mobile products, which likely made its customers in the Mobile Order & Pay test markets more open to adopting a new mobile feature.
So you as an Independent Coffee House/Shop owner are left wondering how to compete – Here are some suggestions and a possible solution or two:
1. Launching your own Mobile Order/Loyalty App
Although this is not a silver bullet, it will most certainly help reach customers in ways independent coffee/Tea shops have not been able to do in the past. However, no ordinary loyalty program will do. It must be digital, it must be mobile and it must be on an order and pay network. A mobile order and pay app allows the coffee shop to communicate specials through text, email or provide App notifications to consumers who are on the program of those specials from day to day. Good luck doing that through a paper based or POS based program.
Also, independent coffee shops should not bother investing in or launching their own custom order/pay/loyalty program. Very few customers will ever download a mobile app specifically for a local business they visit once and a while. However, customers will absolutely download an app that aggregates (community app) all their mobile order, loyalty and payment programs in their neighborhood and city, these are called order payment networks. Not only do customers track their sales and previous sales, for the coffee shop, but they can also order and pay for their orders for all their other local stores they like. Coffee shop and Tea shop owners therefore have the ability to reach other users in their neighborhood not yet customers of theirs.
Imagine sending a marketing message to the consumers of the stores on the same street and inviting them for coffee! Tea and Coffee Shop owners should most certainly opt for a service like Platinum Edge Medias Mobile App (yes, we are biased!). It is mobile, it is a network, it provides owners the same technology and ability to attract and retail customers as Starbucks and Second cup. Business owners under estimate the impact a good mobile order and pay app program has at motivating customers to come back more often and buy, after all this is the reason Starbucks is SO successful.
2. Quality over quantity
While some companies are busy creating the newest flavor Frappuccino, others are focused on the basics of offering high quality coffee products. The goal for these businesses is to keep customers coming back for fresh, gourmet caffeinated (or not) products, consistently make high quality coffee every time. The product will speak for itself and customers will notice.
It seems Coffee is following in the footsteps of niche craft beer establishments. Consumers, foodies, restaurateurs, and coffee connoisseurs are very much interested in the art behind coffee making. The popularity of the coffee process is certainly due to the fact that consumers are tired of low quality, sugar induced variety from the large franchise brands. Instead, consumers want a quality cup of rich flavored JOE. Become known for the quality and style of what you serve and your location will be listed as a place to go for great coffee in your city. Having a great mobile app to get them in and out quickly will help here greatly.
4. Leverage Location Based Technology and Marketing
Can your shop be found online, in local maps, in local business directories listing coffee shops? Are you using a mobile order and pay app like Platinum Edge Medias Mobile? If not, you are losing customers. Small business owners make the mistake of thinking that people will find them if they open a retail location. That their customers are those walking on the street. This is no longer the case as 86% of Americans people have smartphones in this country and most search or are notified of retail location around them that might interest them. Yes, coffee is an activity of habit but you can use modern technology to entice customers to come to you.
5. Diversify your location
Starbucks and Dutch Bros are on every corner. In addition or instead of competing for the same street traffic, expand or launch in non-traditional locations such as: Universities, apartment dorms, casinos, hotels, Medical centers, airports, Retirement communities, inside larger retailers (Hardware Stores, Grocery Stores, etc). Avoid tourist locations since large chains would be able to better compete for the tourist dollar. Again having a mobile coffee shop order app is essential here to competing, even though you may already be in one of these types of locations.
6. Diversify your product line…to extend your reach
If you offer a great quality coffee, then extend your product and experience for consumers..especially to customers that cannot reach your location. Some ideas include: single serve coffee for the home, also offering them for sale at grocery stores, universities, hotels, etc. Attractive coffee sets as gifts, coffee cups, cappuccino cups, etc. Do not focus your attention away from your coffee quality just to sell merchandise…instead focus on selling more of your quality coffee to customers that do not or cannot come to your location. Making a drink and selling it is far more profitable than alternatives.
Perhaps focus on fine espresso and other Italian style. Large coffee chains like Starbucks, Second Cup, etc simply does not have a good hold or reputation for espresso and other traditional Italian coffee drinks. Independent coffee shops can compete well by focusing on high quality espresso, cappuccino and lattes. If you focus entirely around espresso this will give you a niche reputation, fewer operational issues and costs, targeted marketing and customers that are drawn to good quality coffee. Using the Platinum Edge Media Mobile app to the fullest extent where your menu facing items that have high value should be the first products seen, this is where you maximize ROI and customer satisfaction.
Where everybody knows your name Quality beats quantity when it comes to independent coffee shops. However small business owners also need to leverage the benefits of modern marketing and technology solutions to help them get an edge over larger competitors. Most small coffee shops cannot afford the thousands of dollars needed to compete. However, with Platinum Edge Media's Mobile App it's very affordable, customised to your brand and uses the latest technology in the market to engage your customer base.
Not sure you need a mobile app… just walk out and look at your patrons and count the number of them on their smartphone! Those of you looking to your business’s future need to invest the time and effort now in the move to a mobile ordering and pay app or you might just get left behind.
Learn more about the feature and benefits of you own mobile app, click here!