Starbucks remains the most popular mobile payment app as it keeps a lead over Apple Pay, Google Pay and Samsung Pay, according to eMarketer data. It is worth pondering why Starbucks has been able to become a big mobile payment player.
According to eMarketer, Starbucks is expected to hold its mobile payment lead through 2022. In 2018, 23.4 million people ages 14 and over will use the Starbucks app to make a point-of-sale purchase. Apple Pay is close behind with 22 million people.
Indeed, Starbucks is a success due to its ability to combine payments and its loyalty program, said eMarketer. For other retailers and companies pursuing digital transformation it's worth noting how Starbucks got here.
Here are a few thoughts:
Starbucks had focus and value added. The mobile payment app for Starbucks is an extension of its retail experience and there is a clear return for customers. Customers get loyalty points, coupons and perks like mobile ordering. Aside from some savings, customers get time savings. The focus on its own transactions meant Starbucks didn't have to cut multiple partnerships just to get rolling.
Contrast with Apple, Google and Samsung pay systems: The apps really don't save you much time and it's unclear how the customer benefits.
The Starbucks mobile app was part of a broader strategy. Starbucks' mobile plans were mixed in with the company's in-store experience as well as a broader digital effort. That ability to tie together systems and rewards bolstered the company's success.
Contrast with the other mobile pay leaders: Google, Apple and Samsung have broader strategies, their mobile pay efforts are more about services revenue and keeping customers on their platforms. The mobile payment app integration with the broader platforms isn't clear.
Starbucks has more loyalty. The Starbucks app isn't preinstalled on phones so it's lead is based on real usage and customer preference.
Contrast with mobile payment leaders: Apple, Google and Samsung mobile pay apps are preinstalled and largely force fed.
There's value for both sides in the mobile app data exchange. The Starbucks app gives the company data and insights into customer behavior. That insight allows Starbucks to optimize and provide more timely perks. There's a virtuous flywheel created by Starbucks internal use of data. Starbucks also has the trust because it doesn't have broader ambitions for the data. Simply put, your ROI matters in the data swap equation.
Contrast with mobile payment leaders: Apple, Google and Samsung have trust with customers too, but the relationship isn't rooted in commerce. In the case of Google, commerce data may be combined in ways the user won't want. Apple and Samsung are device makers looking to build services and commerce.
Starbucks is one of the few retail operations showing strong growth. A focus on digital relationships with customers is giving the company an edge. Now Starbucks is gunning for an agile, cloud and personalized approach.