Thursday, February 10, 2011

Starbucks' Innovative Approach to Payment

As I listened to the online radio, I notice an ad for Starbucks. Puzzled by the content I listened carefully, so now there is a new concept of paying for your coffee with your Smartphone! As I’m intrigued by this I do a little research, this is what I found in their website. (www.starbucks.com)

 

So it is basically a mobile app with five core features:
  1. Users can manage their Starbucks card 
  2. Reload their balance 
  3. Find their nearest location (available in 6,800 stores nationwide and 1,000+ at Target stores)
  4. Check their Starbucks Reward Star balance
  5. Make Mobile payments
How does it work? there is a bar-code provided in the mobile payment feature and when customers are ready to pay they just hold up their phone to the scanner and it’s done! It claims that it makes it easier and faster for customers to get their coffee for the day. 

I think Starbucks is doing a great job at customer value, and possibly even attracting more customers. Starbucks found out that 75 percent of their customers have a Smartphone and it is more likely that they carry their phones instead of their wallets. With this modern society this is pretty much unquestionable.This will prove that it is more valuable, beneficial, for the customer's needs and wants.

So what is the biggest concern? Since this is a new technology, it still has flaws and security can be an issue.View article

Are you ready to pay for your latte with your phone? Do you find it easier and convenient?

Sources:
http://news.starbucks.com/article_display.cfm?article_id=491 
http://bits.blogs.nytimes.com/2011/01/18/now-at-starbucks-buy-a-latte-by-waving-your-phone/


4 comments:

  1. Starbucks has a good idea. However, I see this more as “reward app” than a convenient way to pay for a product. It does not make a difference, for me the consumer, if I pay with my Visa or if I use the App. No matter which way I pay for my coffee, I am still spending around $5 for a cup of coffee and that $5 are coming out my pocket. However, every time I use the reward app I get a star. The more stars I get the more things I get; things from free soymilk to free coffee. Furthermore, if I use my Visa I get a “point” for my rewards if I accumulate enough points I can exchange those points for miles in multiple airlines and or discounts at other stores. Also, if I connect my visa card to this app then I will get reward both ways, yay Starbucks App!
    That’s the Truth,
    Mauricio

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  2. Personally, in response to both MDing and Mauricio I see this app as extremely helpful for all the starbucks gift cards I recieve as gifts. This Christmas alone I had 5 cards totaling about $40.00 So this way I don't have to worry about which card I've used or if I brought my card along with me to Starbucks that day. I can easily store all cards through this app allowing my purchaes to be smoother and much more conveinent.

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  3. I agree with the fact that the new Starbucks app is very convenient and innovative but as MDing stated in the end of her blog there are definitely security issues with the app. With so much online theft going on today, as simple as it is to compromise your Sratbucks account, I am sure that it could be just as easy to compromise the bank account you have linked to the app. If starbucks could figure out a way around this flaw then I would be mire willling to get the app for myself.

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  4. I agree with Alexa when do we draw the line with how much information is available about ourselves on-line. On the other side of this double edged sword, it is soo soo soo convenient to log in and pay bills, transfer money, and make purchases on-line. I'd like to know what companies are going to do to ensure that our information doesn't get into the wrong hands. What new security measure will be or have been put in place to make our generation and older generations feel comfortable with paying on-line?

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