Starbucks is doubling down on mobile ordering – should you?Author: MOBI
In March, Starbucks announced it is doubling down on mobile ordering by opening its first mobile-only store. The company created the pick-up only location as way to increase efficiency for customers using the Starbuck’s mobile app.
Starbucks first launched mobile ordering on its app in 2015 and experienced instant success. Customers were eager to skip long lines and expedite the ordering process. The company had over 5 million transactions in its first month, accounting for over 10% of orders at busy locations. Starbucks’ new location will better serve the growing number of customers who order online.
Since Starbucks’ initial launch in 2015, many QSRs from around the world have tested mobile ordering. Recently, McDonald’s stock was upgraded when the company announced that 14,000 locations would start receiving mobile orders at the end of this year. Even early adaptors, such as Chipotle have continued to make investments in digital ordering with its “Smarter Pickup Time” feature. The feature, released earlier this year, was created to make mobile ordering even easier.
While some big brands have invested in complex build outs, QSRs of all sizes are turning to more affordable technology partners. New Zealand based restaurant, Burger Wisconsin launched online and mobile ordering with Mobi2Go’s digital technology at 22 locations in 2014. The company saw a significant increase in revenue, a reduction in phone orders and improved order flow in the kitchen – even with over 80 burger combinations available.
As technology continues to advance, mobile ordering is becoming easier and more affordable for businesses to integrate. Here are three reasons so many QSRs are taking advantage of mobile ordering.
Mobile ordering increases order size
When Taco Bell launched mobile ordering in October 2014, the company saw immediate success. In the first six months, the app was downloaded 2 million times and gained an average order size that was 20% higher than in-store customers. By 2016, order sizes continued to increase on the Taco Bell app. The app is now producing an average order size that is 30% higher than in-store purchases.
So why are people ordering more on mobile?
Add-ons are more convenient to purchase on mobile. In fact, Taco Bell customers who order in-store are more likely to remove toppings than add new ones. In-store customers can also feel pressure to order quickly as a line builds behind them. Customers who order on the app feel less pressure and are often offered additional upsells that customers in stores can overlook.
Large QSRs aren’t the only stores experiencing revenue increase. Pizza shops that offer online ordering have seen an increase of 15-20% in the average ticket size. When customers feel less pressure to rush through their order, they have more time to select add-ons which increases each order size.
Mobile ordering boosts efficiency
Starbucks’ new mobile order only store was launched with one goal in mind – to boost efficiency. With mobile orders representing 20% of Starbucks’ US store sales, the pickup only location will help those customers avoid long lines at pickup.
Many other QSRs are experiencing increased efficiency in takeaway orders for both customers and staff members. On average, 75% of phone orders more than a minute and 30% take longer than three minutes. Offering an automated option to customers will not only increase the accuracy of orders but can save hours of worker time. This frees up your staff for other tasks.
Mobile ordering can also help increase the efficiency at the pickup counter by allowing customers to pay online via credit card. This can decrease customer wait time in the store and even give customers the option to have their order delivered by in-house staff or a third-party service.
Mobile ordering increases loyalty
Many QSRs have leveraged mobile ordering apps to integrate loyalty incentives for regular customers. Starbucks has seen success with their tiered point system while many QSRs are turning to gamification to engage with customers.
Gamification allows companies to engage customers by incorporating games, fun, and competition into the company’s mobile app. The average consumer spends 5 minutes a day playing games on their smartphone. By incorporating gamification into their mobile app, QSRs have an opportunity to reach these consumers outside normal dining hours.
When Taco Bell launched mobile ordering in 2015, the company used gamification to increase customer loyalty and spreading brand awareness. Users were encouraged to share the app with others via social media to receive free food and beverages. In return, news about Taco Bell’s new app spread quickly resulting in 5 million downloads throughout its first year.
Regardless of program structure, only 32% of millennials say they would be loyal to a brand without good loyalty program. Additionally, 52% of millennials want to use their smartphones to take advantage of these programs. By incorporating a loyalty program into your mobile ordering, customers are five times more likely to return to your business.
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