Here’s How Starbucks Is Taking Its “Mobile Order And Pay” To The Next Level
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Recently, at its Biennial Investor Conference in New York, Starbucks‘ (NYSE:SBUX) announced its five year plan for global growth. As the company’s technology savvy COO Kevin Johnson takes charge as the CEO, the company unveiled an innovative conversation ordering system called “My Starbucks Barista”, powered by artificial intelligence for its mobile app. Customers will now be able to place orders through voice commands using the “Mobile Order and Pay” app. After pioneering the Mobile Order and Pay technology last year, Starbucks has seen an increased loyalty and repeat orders from customers using the app. Orders through this technology account for around 8% of Starbucks’ total U.S. transactions. We believe customer convenience will be a key driver of revenues for Starbucks in future. With a voice based ordering system, the company is looking to make this option more personalized, just like talking to a Barista. This is a sign that Starbucks is committed to innovation, both at its stores and in technology to enhance customer experience. This should drive growth for the company in the long term.
Artificial Intelligence To Increase Consumer Convenience
As customers look to find easier ways to order their coffee (instead to scrolling through a long menu), Starbucks’ voice and text based ordering should make it extremely easy and quick for them to place their orders. Through this innovation, the company is looking to mimic the store counter experience through its mobile order app. Based on the customer’s ordering history the app will be able to suggest personalization and add-ons which the customer might be interested in, increasing customer loyalty. This initiative shows that Starbucks is pushing the envelope to make its technology experience as convenient for customers as possible. After the advent of voice-based virtual assistants such as Apple’s Siri, Amazon’s Alexa and Google’s counterpart, customers are increasingly finding voice-based commands convenient and are getting used to this option. By adding voice-based ordering option to its mobile app, Starbucks is looking to provide the same convenience to its customers. Experts believe that making products and services more convenient will enhance customer loyalty. If these initiatives increase the number of daily customers per store at Starbucks, it can impact the company’s valuation positively. According to our estimates, this number will increase from 495 in 2016 to nearly 530 by the end of our forecast period.
There can be an upside to our price estimate if this number increases at a rapid pace.
As Starbucks chalks out its future growth plan we believe technology can play a significant role in this growth. Continued focus on technology innovation can ensure that company keeps its customers delighted with the conveniences offered thus driving customer loyalty and increased sales.
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