Mobile Commerce

Shift Happens (In Payments)

Several years ago, I was listening to current JW Player President, Chris Mahl, give a talk on mobile payments and loyalty. He started the speech by recounting something they lived by during his days at Oracle: “shift happens.” It does. In fact, if you follow mobile commerce, a major shift took place in the last 20+ days. If you didn’t take note, then get your head out of the sand.

On Sept. 21, Starbucks rolled out mobile ordering. It is a seismic event in mobile commerce and the speed at which it is shifting consumer behavior is staggering. A little later in the piece I will show the real-time transformation of a Starbucks location in Chicago that took place this week. But first, let’s explore why it’s revolutionary and more importantly why it’s working.

For many (yours truly) the human condition is one of impatience and intolerance of wait times – tollbooths, TSA lines, whatever. I have walked past more Starbucks than I can count because of intolerable lines.

As a society we relish speed, convenience and efficiency. Now, with Mobile Order & Pay, Starbucks delivers all three with a dash of surprise and delight. And while crude – they even tell me the approximate time it will take to have my order ready. No lines again, ever.

I have been struck by the increased activity around mobile in various locations.

When Starbucks rolled out payment with the phone as the access device in the store, it grew, but it creeped along. Mobile order, especially in downtown Chicago, has erupted. Why?

Well, I will posit that humans are creatures of habit. I panned Tim Cook on these pages for the Apple Pay launch when he described the payment experience at the point of sale as broken. It’s not. It works really well. Retraining and reconditioning humans to pay with an instrument other than cash or cards is going to take a long, long time to shift.


Unless you build huge value around the transaction. That is how shift happens — you incent and better the transactional experience and then and only then will you shift consumer and market dynamics.

Hooray for Starbucks for accomplishing this.

Mobile order in their app has succeeded. It has succeeded primarily because we all know how to do it. We don’t have to be retrained to order a cuppa joe on the go. Thanks to the likes of Uber, Lyft, eBay, Drizly and otherIMG_2639s, we know how to order goods and services in-app, and more importantly trust the security of embedding payment credentials in those app environments. Like I said, ordering a cuppa joe is a no-brainer. No retraining – just shift to a faster and more delightful user experience.

Shift will cause many pain points. I suggested two weeks ago that Starbucks would have to retrofit many of their retail footprints. I mentioned it was happening in Chicago. These pictures show how innovative and resourceful the partners in Starbucks locations can be. They’re responding to massive shift in real-time – with a shelf dedicated to mobile orders and a poster board and sharpie! A Starbucks I have wandered past every morning for 20 years with a line out the door now idles with a few customers at the register and 20+ on-the-go commuters waiting for their name to be called. That my friends, happened in about 20 days post launch.

It’s a seismic shift that has massive influence on everything from the register, to barista training to dealing with non-mobile consumers that have to watch waves of customers walk past them and be served first. Lots of work and investment is left in this early inning. But the shift is happening, and it will come faster than most imagine. It makes one wonder about all the investment at POS around EMV and NFC. It is, more than likely, totally unnecessary. Another topic for another day.

Is it perfect? No. IMG_2640A massive error and omission (conspiracy theorists would say intentional to suppress reward redemption) is that the user can’t redeem free drinks for mobile order. But that is a fixable issue and one I expect right quickly.

In the meantime, a major hat tip to the team at Starbucks. The leadership in Seattle and the many partners in the thousands of locations nationwide should take a bow. They nailed this one, and for the competition – the chase is on!


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