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The marketing research firm has predicted that 23.4 million people in the US are going to use the Starbucks app to make a point-of-sale purchase at least once every six months in 2018, placing it ahead of the 22 million people who will use Apple Pay.
And with Google Pay and Samsung Pay predicted to be used by 11.1 million and 9.9 million users respectively, they will fall much further behind Starbucks.
What’s more, eMarketer claims that the user gap between the Starbucks app and Apple Pay will actually increase through to 2022!
(You will find more infographics at Statista)
Now Starbucks is major company, worth an estimated $84 billion – we’ve all heard of the coffee giant and I defy anyone reading this to claim they haven’t been inside one of it’s 868 UK outlets at least once.
But this is Apple we’re talking about – a world dominator worth more than $900 billion and making up nearly 1% of the world’s GDP in value, according to the World Bank.
I think we can all agree that nearly everything Apple has touched over the last decade has turned to gold.
Apple Pay, however, is the exception in my view – even though it’s now accepted by more than half of US merchants, according to eMarketer.
Apple Pay came along in 2014 (four years after the first version of the Starbucks app) and, it’s fair to say, legitimised the idea of mobile payments in the eyes of consumers.
But since then, it’s success has been mixed, with adoption rates described as a slow burning candle.
Why is this? Well the truth is, Apple Pay, alongside Google Pay and Samsung Pay, has added little or no value to the payments experience. None of us can really see the difference between tapping a contactless card and tapping a smartphone (after fingerprint recognition) on the point-of-sale.
The successful payments strategy lies in providing a customer with a positive experience beyond payment – and that’s where mobile wallet experiences like the Starbucks app comes in!
According to TechCrunch, one of the major reasons there’s been high user adoption of the Starbucks app is because “payments are tied to loyalty”.
As well as being able to pay for orders, the Starbucks app allows users to earn and track rewards, send gift cards and order ahead.
It’s success lies in the fact that Starbucks has created a mobile wallet experience that goes beyond the mobile payment experience found in the likes of Apple Pay, Samsung Pay and Google Pay.
I don’t mind saying that Starbucks was one of a handful of brands that inspired me and my fellow co-founders to launch Yoyo back in 2014.
We knew back then that the question to answer was not how to make payment relevant for mobile, it was how to make mobile relevant for retailers and their customers.
Starbucks was the first to crack the code with their mobile loyalty experience, but we wanted to democratise this, aiming to bring that mobile payment and loyalty experience to customers across, not one, but multiple-retailers (Yoyo-powered payment and loyalty app experiences are now accepted in more than 2000 outlets across high street retail, education and B&I just in case you were wondering).
Additionally we wanted to add even deeper value for the retailer. So we decided to take the experience further and strive for Tesco Clubcard-level insight (customer basket data) with every transaction.
So, unlike the Starbucks app experience, through this unique basket data-led insight we can provide retailers and their users with hyper-personalised loyalty experiences, past purchase-based customer recommendations and marketing campaign success measured by actual changes to customer behaviour.
What’s more, we also provide digital itemised receipts – something that still alludes the Starbucks app experience.
But here we are today in May 2018 and Starbucks rightly enjoys its moment as king of all mobile payments.
And in a happy coincidence, it’s also just over a year since a major rival of Starbucks launched its very own unique payments and loyalty app.
In only 12 months, the Yoyo-powered Caffe Nero app has taken an 8% share of checkout at the UK’s third largest coffee chain, gained 350,000 registered users, processed more than 3.6 million transactions and gained an average mobile app retention rate of 70% after 90 days (the average retention rate for a typical app is just 29%!).
What’s more, it’s awarded over 5.7 million loyalty stamps to customers at the point-of-sale.
And uniquely for a coffee app, it also delivers fully itemised receipts and has the ability to run highly engaging in-app surprise & delight campaigns (my personal favourite was the Caffe Nero Christmas Cracker – more info can be found here if you’re interested.)
Like Starbucks, the Yoyo-powered Caffe Nero app is a prime example of adding value to the payments experience.
While the likes of Apple, Samsung and Google have just created another payments experience, the Starbucks and Caffe Nero apps are the definition of a full end-to-end mobile wallet experience.
But unlike Starbucks, Caffe Nero is harnessing the power of basket data to turn anonymous coffee drinkers into engaged customers with identifiable preferences and behaviours – something that benefits both the customer and the retailer.
So I’ll end by saying bravo to Starbucks! (But watch out – some of us have got our eye on that mobile payments crown of yours! 🙂 )