Costa Coffee Trials Delivery, Loyalty Program For A Faster Fix

Ordering a cup of joe in the morning is standard practice for many, but customers couldn’t order it from their phones until 2015, when international coffee chain Starbucks launched order-ahead on its mobile app. Since then, the chain’s mobile orders have more than doubled and, as of 2018, made up 13 percent of all U.S. sales.

Now, five years later, many coffee brands are clamoring to compete with mobile apps, loyalty points, online payments and even home delivery services. Costa Coffee, the U.K.’s leading coffee chain, is one of the newest entrants to the mobile order-ahead world. According to Arslan Sharif, Costa’s global digital and loyalty director, mobile ordering is quickly becoming ubiquitous for coffee brands, and companies need to consider the best ways to capture customers’ loyalties in a world where they can get their flat white in seconds from anywhere.

“One of the things we know from our customers and our customer insights is that the desire for speed and convenience [is even greater] now that we see more customers engage with digital and with our mobile app,” Sharif said in a recent interview with PYMNTS.

Costa recently launched its mobile order-ahead service, Costa Collect, after a successful pilot last year. The app is now ready for use with 110 stores in London and relies on customization and personalization to keep customers coming back.

UX, Payments and App Innovation

Costa Collect is designed to reduce in-store lines and boost satisfaction, as users tend to ask for more functionality without any impact on speed or service.

“We did a lot of operational testing beforehand. We actually set up mock stores where we would test the operational experience of customers ordering on the phone and showing up to pick it up,” Sharif said, adding that the service will expand to hundreds more Costa stores across the U.K later this year.

To expand the service, the company will rely on similar customer insights and will add several new features. Costa’s stores have made physical infrastructure changes to mirror the app innovations to reduce pain points such as long lines while adding personalization to the overall experience. With major brands like Starbucks nipping at the company’s heels, being on mobile isn’t enough, he said. Costa needs to innovate continuously.

One such innovation is loyalty rewards, which Costa has added to 8,000 self-service kiosks. Customers who use the kiosks can gain reward points by scanning a QR code, Sharif said. Additionally, the company is planning to upgrade in-app payment methods — more specifically, Costa wants to support alternative payment methods as its platform expands.

“We made it easy for customers to add their payment card for Costa Collect, where you can just scan the card and [the app] will automatically populate [the card’s information] … you just put [the] security details in and make your payment.,” Sharif said. “You can pay by Apple Pay [at Costa locations], and as we continue to develop the loyalty app, things like integrating payments into the app experience is something that we want to develop further this year.”

The company is also dedicated to making sure that the platform is secure via tools like artificial intelligence (AI) and machine learning, Sharif said, adding that Costa has “invested heavily in security” to make sure that consumers’ data is safe on its mobile app. Security is more important than ever for mobile platforms, and it is of increasing importance to both users and businesses in the U.K. thanks to the integration of rules like the revised Payment Services Directive (PSD2) and General Data Protection Regulation (GDPR).

To achieve this mobile security and data privacy, the company partners with a firm called Akamai to “filter and inspect” traffic before it enters, he said. Akamai’s platform aims to distinguish between real, human interactions and transactions initiated by bots or other automated hacking tools.

Delivery and the Future of Mobile Order-Ahead

The company is also looking to add home delivery to the platform, and it is currently piloting the service with third-party delivery provider Deliveroo at six London locations. Sharif hopes home delivery will “drive into that whole speed and convenience piece” for customers. While Starbucks has dominated mobile order-ahead since its original launch in 2015, it is also only just trialing home delivery — a service that could wind up being a key differentiator.

“We’ve invested quite heavily over the last 18 months in developing our mobile app experience, and that’s ranged from clearly developing Costa Collect and new innovations [for self-service machines],” he said. “The main benefit is that whole convenience piece … making it really simple to buy coffee, to use mobile order-ahead and save time.”

These innovations reflect a customer base that’s reliant on and willing to use mobile, but this kind of loyalty program may need further upgrades if it’s going to entice coffee addicts to order-ahead for a cup of Costa coffee every morning. With consumers getting more and more used to variety and options on mobile, it’s unclear what it will take to roast the competition.