Insights for Entrepreneurs

How is the Starbucks app impacting the coffee industry?

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Marketing Team

10 Dec 2022 on Insights for Entrepreneurs · 13 min read

How Starbucks doing

13 min read

From the ancient greeks to modern business leads, nearly all businesses follow different rules to dominate their rivals by doing something unique. For instance, they deliver impressive advertising and eye-catching offers to stand out from the crowd. On top of that, many business directors believe branding is the only key to competing with their opponents.

That’s a myth. Branding is not the only way to give the best competition. In this fast-booming tech world, leading companies in eCommerce, Technology, and even automotive and a few emerging media and food chain players also have their secret recipe for success. They never follow the traditional recipes that other firms do step by step; instead, they build their recipe of strategies to stand alone and make their competitors follow those strategies.

The famous coffee house Starbucks follows the archetype approach. Starbucks’ app impacts the coffee industry not by branding but by building new rules with fascinating strategies. In this article, I’ll share what the coffee giant did, its strategy, and mindblowing facts about why it was so successful and how you can build your own rules to dominate the industry and for more delve into the article.

The mesmerizing aroma of the Coffee industry before the Starbucks app

Let’s explore back from the ancient to the modern coffee industry that welcomes you with its mesmerizing aroma before you know why the Starbucks app impacted the coffee industry.

From ancient to modern shots of the espresso industry

From ancient to modern shots

Nowadays, coffee is the lifeline to most of us. But, in ancient days, they never enjoyed their morning beverage as coffee, and this aromatic drink is relatively new compared to the historical world.

Culture shock, isn’t it?

Moreover, the coffee industry has been booming for about 500 years, which is half the amount compared to other beverages like tea and alcohol. Still, the coffee industry is fascinating, with its exciting history below.

  • The coffee started before 1000 AD by Kaldi, an Ethiopia herdsman from Kaffa, and his goats; the rest is history with the booming coffee industry.
  • After a decade, in 1475, the world’s first coffee shop, Kiva Han, was exclusively launched in Constantinople. This shop started its magic with its high-quality roasted beans by delivering the aroma of coffee to the world.
  • In 1600, after Kiva Han, Italy and England started their first coffee house and became famous coffee houses in later years.
  • Throughout the 1700s, people believed that coffee became an exotic product, which means it so rare and expensive, and it became the wealthy people’s beverage.
  • The cost of coffee beans started to fall in the 1820s, and build the bridge which was more available across the continent.
  • In the early 20th century, the coffee industry started to enhance roasted and ground coffee deals in the US by implementing many subtle and complex marketing strategies. For instance, Alexander Sheppard & Sons began its Morning Sip with quality beans in 1916 and earned massive success in 1917.
  • After the success of Sheppard & Son’s strategy of promoting their products, In 1920, all the major coffee industries in the US tried the approach. They spent almost $3 million to establish those marketing strategies.
  • After four years of marketing strategies, in 1920, the Maxwell coffee house increased its profits by 85% and became the 90’s famous coffee house in the US.
  • The second world war ended, and in the 20-century, the instant coffee industry started to rule the world by delivering conveniently to its consumers.
  • In the late 20 century, the luxury lifestyle boomed in the coffee world with the variety of quality beans, products, and convenience offers.

However, the marketing spark of the coffee chain became redefined in the late 20th and early 21st century, and it changed the centuries-old approach into brand-new techniques to improve the coffee house.

Which coffee houses highly dominated in the early 20 century?

According to the mid-century-focused website, Maxwell Coffee House was the top coffee house in 1964, holding 21% of the market share. Other peak-hit coffee houses are:

Graph showing the highly dominated countries

These are the seven coffee houses that ruled the coffee world between 1950-1970. However, After those seven coffee houses, in 1971, at the corner of Seattle’s Pike Place Market, Starbucks started to roast its beans to deliver high-quality beverages. But now Its become the coffee chain’s giant after facing many problems. If this brief story urges you to know about the Starbucks turning points without delays, check out the below sections to inspire you.

The Turning point of Starbucks

Before you dive into discussing why the Starbucks app impacts the coffee industry, it’s time to know the turning points of Starbucks after stepping into the digital world and those mindblowing facts about the sensational coffee houses.

The beautiful days of the Starbucks app

After 37 years of dominating the coffee industry with its high-quality roasted coffee, Starbucks opened almost 16680 cafes worldwide. However, Starbucks didn’t satisfy because they wanted to level up their business and deliver exemplary customer services even better in the competitive world.

So, in 2009 they stepped into the digital world by launching the My Starbucks Rewards app, which satisfied their consumers by providing a new-level experience on purchasing their morning coffee without waiting in those dreadful creepy lines.

On top of that, in-app, Starbucks offered attractive loyalty programs with stunning, user-friendly designs by understanding their customer’s needs. After a few years of the rewarding a loyalty program, in 2014, they leveled up their digital world rule by adding quick mobile pay and ordering features which collected many positive responses with almost $21,316 in 2016 with more than 25,000 cafes, twice the revenue of 2010.

These are very few days of remembering the beautiful days when Starbucks started to bloom in the open-source environment. Get ready to hone your brain to know how this technology has rules the coffee industry. But, before that, let’s understand how this magic works in the below seciton to build your coffee shop app.

How does the Starbucks app work?

Starbucks provides convenience to its customers through its app, which delivers outstanding services. So, as a consumer of Starbucks, you can quickly order your iced americano by registering to the coffee house app using mobile numbers, email, or social media accounts.

Once you have placed the order employing the nearby locations, you can get your americano once you reach the Starbucks cafe without waiting on those long trains. Moreover, you will get freebies through the stars or plenty of offers while finding your order by scanning the QR code for mobile payments. Thus, you can quickly pay your bill without any flaws.

Top-notch mindblowing strategies behind the app

It’s time to take a sip of coffee while analyzing the strategies of Starbucks in the below sections, which impact the coffee industry from the coffee to the mobile king.

  • Starbucks uses personalized recommendations, leading to more purchases between customers and making them loyal consumers. This approach helps Starbucks increase individual sales by up to 50%.
  • The coffee house’s Order and pay strategy plays a significant role in gaining long-term patrons. Especially with its advance payments, you don’t need to waste your golden hours in those long queues, and you can also earn stars after completing a successful settlement and more. As a result, in 2021, Starbucks was crowned as the top second mobile payment app in the USA.
  • This sensational coffee house invites its consumers often to participate in the survey through its mobile app to improve its customer satisfaction and business in the competitive world.
  • The game-changing loyalty program of Starbucks is gaining more consumers with its incredible deals and freebies. The CEO of Starbucks stated that they gained almost 53% of revenues from their loyalty program.

These are the four primary strategies that make this coffee house so popular in the coffee industry. To learn more techniques from Starbucks, you can check my previous blog to learn the 3 Things You Can Learn From Starbucks

How many coffee aficionados are using the Starbucks app?

In the Q3 2022 earnings call, CEO Howard Schultz stated that 27.4 million coffee aficionados were using the Starbucks app and added that it would increase by 13% yearly.

The mesmerizing statistics of the Starbucks app

If those mindblowing strategies and the surprising users urge you to know the coffee industry’s impacts due to the coffee giant, let me blow your mind with a few mesmerizing statistics about the coffee chain below before we discuss the crucial facts of Starbucks.

  • According to Statista, 31.7 percent of people used the Starbucks app in 2019 for the mobile pay and order feature.
  • Starbucks’ app rewards program helps improve more than 50% of its revenue with millions of loyal members.
  • In 2018 eMarketer surveyed the mobile payment app market; surprisingly, Starbucks became the most popular in-person mobile payment with 23 million users in the US market, which beats Google and Apple pay.
  • Starbucks app Q3 net sales rose about 9% to $8.15 billion and are expected to increase in the upcoming days.
  • This coffee giant also states that consumers who engage digitally purchase 2 to 3 times more than those who have not used the Starbucks mobile app.

So far, I hope you have gained considerable knowledge about the coffee industry and Starbucks’ fascinating history and strategy, statistics, and some mindblowing facts. It’s time for your most awaited moments in the blog. Let’s discuss this in the below section.

The seven wonders of the Starbucks app

While reading the above section, have you ever thought about how the Starbucks app is gaining so much popularity and how it impacts the coffee industry?

If yes, share your thoughts in the comment section or follow up on the below section to find your questionable reaction answers.

It's really seven wonders

The break fresh digital engagements

As I mentioned before, Starbucks never followed any strategies of the traditional coffee industry; instead, they created a unique strategy to shine up in the digital era. One such unique strategy is digital engagements.

This engagement has paid enormous dividends to the coffee giant because of its strong engagement through social media by promoting its products and loyalty program; Starbucks also utilizes the spark of its consumers via the open innovation forums like My Starbucks Idea. For Instance, Starbucks’ famous mobile and pay orders come from the idea of their consumer.

These unique ideas are the number one impact of the coffee industry, and that’s why many coffee industries are trying to build their digital engagements in this fast-growing tech world.

Starbucks app provides child play user-friendly

These days people prefer simple steps rather than draggy steps. But, most coffee industries need more quality to provide simple and elegant designs to their customers. In contrast, Starbucks delivers a user-friendly platform with a simple and innovative design for its consumers.

Starbucks app delivers attractive features with five simple stunning menus such as Pay, Stores, Gift, Order, and Music. It also includes geo-location to find nearby cafes and those super-duper challenges to earn plenty of stars to acquire freebies.

However, those innovative features have been well received and have not overwhelmed users. That’s why Starbucks is impacting the coffee industry with its highly engaging, user-friendly mobile app.

Impressive methods for deep Personalization

Starbucks’ significant key to its success is its high-level personalization approach. It may sound somewhat trickier to store the consumers’ data, but Starbucks plays a substantial role in the coffee industry because of this personalization.

For instance, they know your regular order by deeply personalizing your history, and they even suggest nearby locations, products, and personalized offers earn bonus stars based on your interests.

The most exciting thing about this personalization approach is that they offer a free treat for your birthday without forgetting, like your best friend.

Services scattered in the corner of the world

Starbucks became the coffee giant with 34,317 branches and millions of loyal customers. In the USA, you can find almost four Starbucks within 1 mile, which means Starbucks never focuses on its traffics, demographics locations, and even the competitors’ locations.

If you think it’s a predicament choice, remember that this coffee giant dominates the coffee industry due to this dilemma choice.

The coffee house app rewards programs direct the competition

Nowadays, every industry provides rewards programs for their customers. But the question is, are they earning profit or gaining loyal customers?

The answer will be yes, but they get a small amount of profit and new customers to the table, which is half the amount they spent on the rewards programs. This is because they don’t know what their customer needs.

At the same time, Starbucks provides the best loyalty programs, which satisfy their customers’ requirements. In return, This coffee house solidified a strong relationship with its million users through digital engagements and gained numerous revenue. For instance, in 2018, Starbucks’ loyalty program provided hefty growth with 11% growth in users, and it became a game-changer for the coffee industry; now, plenty of coffee industry follows Starbucks’ tricks to improve their business.

Starbucks mobile technology drives online ordering and paying easy

The beginning of the Mobile Order and Pay in Starbucks provoked a few congestion problems inside the coffee house. As one consumer stated, “Why should I order ahead if I just have to stand in line to retrieve my order?”.

Starbucks quickly responded by including dedicated stations for the consumer who ordered his latte via the app, differentiating it from the existing in-store experience. Starbucks also helps its customers get notified of new products through notifications or email because of the mobile ordering system.

This coffee giant also permits multiple payment options through its app; once the payment is made, it will give you stars to get freebies and attract plenty of users to use their app.

Hence, by delivering various functionalities, Starbucks’ mobile order and pay permit their consumers to make their orders and pay more convenient than any other coffee industry.

The coffee giant collaborates its app with other platforms and services

Most of the coffee industry is scared to collaborate, but in concurrent, Starbucks is collaborating with Spotify to enhance its app experience with its Now Playing feature. Now, their purchaser can find songs played in their favorite Starbucks stores.

These features eventually level up both Starbucks’ mobile app usage and sign-ups for Spotify’s service. Another collaboration bloomed in 2016, with Lyft passing out Starbucks loyalty program scores to people who employ the ride-sharing service.

These collaborations help to enrich Starbucks’ customer retention and support the app to evolve more prominent to the user’s brand experience.

I hope you gained picture perfect about how the Starbucks app impacts the coffee industry through the above seven wonders of the Starbucks app.

Let’s begin with adding those smashing techniques

In my opinion, I have seen many times that when businesses switch from a traditional way to a Transcendar mode, they usually experience a quantum leap in their competitive standards, which includes a massive increase in revenue, market share, or the count of their coffee shops.

If you are urged to start a business quickly, you already own a spark to build your business. If you don’t know where to start, remember that opportunities are high, so your company can enjoy similar success as Starbucks. If you are still doubting yourself, Don’t worry; you can be the top star with Hitasoft – Loyalty Program Development. They help you play your own game and upgrade your business by aligning your organization with it.

 

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