The Starbucks App: A Mobile Payment Model for Digital Marketers?

In the Forbes article, "Why Is The Starbucks Mobile Payments App So Successful?," Brian Roemmele argues that Starbucks' mobile payments app was successful because it combined the following formula in reaching its success.

Existing successful loyalty program  
+Existing success gift card program 
+Simple 2D barcode on consumer device 
+Sophisticated 2D barcode scanner on POS 
+Perfect cloud merchant integration 
+Simple to use consumer app
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The most successful wallet app in the US


At 11% of total sales volume, Starbucks' mobile wallet app is a "staggering amount of transactions for a single retailer, about four million mobile payments per week, and eight million consumers are using mobile apps to pay."

The success can be attributed to the app's developer, Benjamin Vigier - who now heads retail payments at Apple. The key factor was embracing what consumers and stores already use - smartphones and 2D barcodes readable by existing POS system - rather than forcing them to change to new technology. Another success factor was "empirical, practical and pragmatic research," something that echoes the need for constant testing that occurs in other digital marketing work, such as SEO/SEM. Testing is key to success.

It is surprising to me that many retailers still use the punchcard system, which leads to unmaximized gains in loyalty, given the reality that most customers forget their cards at home. Vigier's invention was a precursor to Square wallet and other systems which are becoming increasingly popular.

Digital mobile marketing could learn something from the Starbucks model in fortifying consumer loyalty in an era of increasing app-based competition. Smartphones are increasingly crowded spaces - what digital strategies can companies implement to ensure that their apps are actually being used?

Interestingly, from a consumer perspective, iTunes Starbucks app rating is a dismal 1.5 stars out 5 (at the time of publishing). In my opinion, the article erroneously states that the app is "brilliantly simple." The user interface is actually a bit clunky and old school. Complaints about the user experience by iTunes reviewers range from general slowness and missing loyalty "stars" to inaccurate transaction balances and "bad colour scheme," -- amid a host of other criticisms.

At the time of writing this blog, I noticed that Starbucks just launched a brand new app that is completely redesigned. Given the high percentage of its sales volume directly attributable to this app, I'm guessing they are taking their customer feedback very seriously.