With great speculation that 2011 will be the year of the “mobile wallet,” retailers continue to explore the most efficient ways to leverage smart phone capabilities in-store. Starbucks announced this week the launch of mobile payment in its 6,800 U.S. company-operated stores and more than 1,000 Starbucks located in U.S. Target store locations. Customers can purchase items in-store with select smart phones as part of the national program, which builds on the introduction of the Starbucks Card Mobile application and a successful mobile payment test program.
“Today, one in five Starbucks transactions is made using a Starbucks Card and mobile payment will extend the way our customers experience and use their Starbucks Card,” said Brady Brewer, VP Starbucks Card and Brand Loyalty, in a company press release. “With mobile payment, the Starbucks Card platform further elevates the customer experience by delivering convenience, rewarding loyalty, and continuing to build an emotional connection with our customers.”
Starbucks reports that more than one-third of its U.S. customers use smart phones, of which nearly three quarters are BlackBerrys or iPhones.
The new application allows customers to manage a Starbucks Card account, check balances, reload a card and check reward status. To make a purchase, shoppers hold the mobile device in front of a scanner on the countertop and scan the Starbucks Card Mobile App’s on-screen barcode.
The technology has been successfully test-marketed in Seattle, Northern California, New York and more than 1,000 Starbucks in U.S. Target stores. Customers loaded more than $1.5 billion on Starbucks Cards in 2010, an increase of 21% over 2009, driven in part by the My Starbucks Rewards program, according to the company.
The news of Starbucks’ rollout was announced just two weeks after the National Retail Federation’s (NRF) annual convention in New York, where mobile payment was a key topic of discussion. Mobile payment is expected to grow to $633 billion annually by 2014, with 490 million customers using smart phones for payment, according to Generator Research.
Other Mobile Payment News
A number of other recent mobile payment announcements cement the notion that retailers should be looking seriously at adopting the technology in the near term.
Usablenet has integrated with PayPal’s mobile payments product, Mobile Express Checkout, to enhance payment offerings on clients’ mobile web sites. Usablenet can now optimally extend PayPal’s Mobile Express Checkout to mobile commerce web sites and other supported solutions, such as mobile applications, tablets, Facebook and other social media, as well as in-store kiosks.
Newly revamped Disney Stores are leveraging Oracle technology to facilitate mobile sales via Apple iPod Touch devices and portable printers. Store associates can look up products, print gift receipts and suspend the transaction if the customer needs to complete it at the traditional point of sale. During the holiday season, in the 40 stores that implemented mobile POS, mobile sales accounted for 15-18% of total sales, according to Paul Gainer, VP and General Manager, North America for Disney Stores. He expects to have 140 of the 200 U.S. stores outfitted with mobile POS by the 2011 holiday season.
Apparel retailer Guess EVP and CIO Michael Relich shared the company’s mobile POS strategy during a “Big Ideas” educational session at the NRF show. Guess has implemented Global Bay’s mobile retail software to roll out mobile payment capability throughout its than 1,100-store chain within the next 3-6 months. During a holiday line-busting test period, Guess saved substantially on the mobile POS implementation cost alone, Relich noted, explaining that the mobile POS units cost approximately $600 each versus $3,500 for a traditional register. Relich said the effort aligns well with the Guess brand identity, and that customers “absolutely love” the convenience factor. “From a brand point of view I think it is kind of cool,” he said. “We’re supposed to be a cool brand and having cool technology [in our stores] helps.”
Also at the NRF event Epicor Retail Corp. demonstrated its mobile retail applications on the Apple iPad and the Apple iPhone. Armed with an iPad and a small Bluetooth barcode scanner, retailers can use these devices to place orders, process sales transactions, and support other Epicor retail applications such as Business Intelligence, Enterprise Selling and Customer Relationship Management.