Euromonitor Presentation.pdf

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KEY TAKEAWAYS FROM STARBUCKS’

MOBILE COMMERCE SUCCESSCoca-Cola Co.

August 25, 2014

@Euromonitor@MEvans14

Michelle Evans | Consumer Finance Senior Analyst

Euromonitor International



© Euromonitor International

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Who is Euromonitor International?KEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS

http://www.euromonitor.com/





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Euromonitor’s research covers industries, countries and consumers KEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS






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FINANCIAL CARDS

ATM

Debit

Credit (Commercial &Personal)

Charge (Commercial &Personal)

Open loop Prepaid

Closed loop Prepaid

Store

CONSUMER PAYMENTS

Card Payment Transactions

Cash Transactions

Other Paper Payments

Electronic direct/ACHtransactions

CONSUMER LENDING

Mortgages/Housing

Consumer Credit

Auto Lending

Card Lending

Home Lending

Durables LendingEducation Lending

Other Personal Lending

Consumer Finance CoverageKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS






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A look at the current landscape of mobile paymentsKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS






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“He wanted to create thefirst phone that people would fall in love

with….He wanted tocreate something that

was so instrumental andintegrated in peoples’lives that you’d rather

leave your wallet at home

than your iPhone.”

— former iPhone product marketing manager

Bob Borchers said of Steve Jobs in 2012

How Apple set the smartphone revolution into motionKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS

Source: Baltimore Sun





Smartphone availability equates to more advanced m-paymentsKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS




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BoostRevenues

Move more people through the line more efficiently

Drive more frequent purchases from repeat customers

Attract potential customers during low peaks in business

ReduceCosts

Lower processing fees paid by merchants

Potential for more secure payments and thus less fraud loss

Better align staffing to business needs

Enhance thecustomerexperience

Connect with the on-the-go consumer

New ways to advertise and market

Earn and redeem rewards in a more seamless manner

Further brandproposition

Richer experience creates stronger brand affinity

Provides a platform for an embedded loyalty scheme

New ways to reward the best consumers for their loyalty

Potential benefits of mobile wallet adoptionKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS






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Starbucks emerges at the mobile payments poster childKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS

Courtesy of Starbucks Corp






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Starbucks found immense success by pairing loyalty with paymentsKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS

MOBILE APP USERS

6MOBILE PAYMENTSPROCESSED BYSTARBUCKS WEEKLY

12million

million


15%OF TOTAL US SALESMADE VIA MOBILE DEVICE






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Players of all types want to know Starbucks’ secret ingredient KEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS







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Can Starbucks’ mobile payments success story be replicated? KEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS

80%OF ALL MOBILE

PHONES SOLD IN THEUS IN 2014 ISESTIMATED TO BESMARTPHONES

50%OF ALL MOBILEPHONES SOLD IN THEUS IN 2011 WERESMARTPHONES







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The right audience

Focus on security and privacy

Ease of use for the consumer

Funding source

Improved customer experience

Embedded loyalty component

Buy-in from staff

Re-engage user base

The eight keys to a successful mobile payments product launchKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS







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Best practice: Mobile success starts with having the right audienceKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS

Courtesy of Burger King Holdings Inc






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McDonald’s

• Numerous m-payment pilots globally, including Sweden,

Belgium, Canada, Japan and Thailand• Offering m-payments, order-ahead functionality and offers

through the Isis mobile wallet in the US

Wendy’s

• Embedded within its My Wendy’s app

• Funded via an attached credit card or gift card• Plans to offer discounts and rewards via app

Burger King

• Introducing app across 7,000 US locations

• Users must load value onto virtual card• App will gives consumers coupons for deals

Quick-service restaurants have strong appetite for mobile paymentKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS






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Mobile is truly geared toward the younger subset of the populationKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS

Source: http://blog.leonardo.com/attracting-millennial-travelers-hotels-visual-story/






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Best practice: Must offer same level of security and privacyKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS

57%US APP USERS HAVE

UNINSTALLED AN APPOVER PRIVACY FEARS

46%UK SMARTPHONEOWNERS REPORTPRIVACY CONCERNS

Source: http://cs.njit.edu/academics/graduate/mscsp.php






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Best practice: Funding source for the mobile wallet is vitalKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS

Pay before:Pre-paid card

Pay at purchase:Direct bank transfer

Pay after:Credit or charge card

Potential Funding mechanisms

Pay before: Pre-paid Card







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Pass-through transactions may be the most effective solutionKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS

Pay after: Credit or charge card

Courtesy of Uber

Courtesy of Isis






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Some wallets try to avoid traditional card network altogetherKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS

Pay at purchase: Direct bank transfer

Source: http://mobilemarketingmagazine.comCourtesy of Zapp






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Best practice: The ease of use for the consumer will be vitalKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS

Courtesy of Google Wallet






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What technology will power this future payment experience?KEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS

NFCChips

Pro: Connection automatically established in

less than a second.

Con: Not available on all smartphones - mostnotably Apple devices.

BLE

Pro: Available on most smartphones since

2012.

Con: Connection must be establishedmanually, which would lead to friction at thePOS terminal.

QRcodes

Pro: Works on most smartphones and at most

requires downloading an app and imputingcard details.

Con: Consumer must open up a mobile appand show the clerk the QR, which results in aclumsy checkout.

Courtesy of PayPal






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Increase in theavailability ofsmartphones

Emergence of big data

Rise of location- based

technologies

Best practice: Enhance the customer shopping experienceKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS






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Sending the right message to the right person at the right timeKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS

Apple Inc






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Location-based technologies drive a consumer-focused experienceKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS

Courtesy of Estimote

Asset tracking

Inventory control

Price matching

Coupon issuance

Product information

Instant payments






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Top brands already leveraging beacons for different functionsKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS

Courtesy of Barclays CenterCourtesy of American Airlines






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Beacons are starting to find their way into store environmentsKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS






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Best practice: Embedded loyalty component is a mustKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS







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Survey indicates that consumers need a compelling reason to adoptKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS

Security

• Nearly half of smartphone users, who have not used mobilepayments, said they had not due to security concerns.

Privacy

• Another third of smartphone users, who have not mademobile payments, were worried about their privacy.

Uninformed

• Some 41% of North American smartphone users wereunaware that their phones could make payments.

Convenience

• Some 37% have not made mobile payments because of theconvenience of their current payment method.

Why Consumers Have Not Adopted M-Payments

Consumer Mobile Payments Survey: Driving Value and Adoption of Mobile Payments— Consumers Want More By Accenture






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Loyalty of the future will be about more than merely miles or pointsKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS


$16UNUSED PERCEIVEDVALUE IN REWARDS

21.9 AVERAGE NUMBER OFLOYALTY MEMBERSHIPSPER US HOUSEHOLD

9.5 AVERAGE NUMBER OF ACTIVE MEMBERSHIPS

2011 Colloquy Loyalty Census

billion






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Train staff as to how to use the app

Educate the staff as to how to answer FAQs

Teach the staff about the app’s benefits

Designate mobile captains at each location

Reward staff for sign ups

Best practice: Mobile app success depends on staff buy-inKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS






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Best practice: Work doesn’t stop after user signs up KEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS

Euromonitor InternationalCourtesy of LeveLUp






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But the story of the mobile consumer extends beyond paymentsKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS

Brandawareness

Engagement Transactions Loyalty






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Mobile weaves into all the elements leading up to the purchaseKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS

Enables mobile-driven offers, coupons and discounts

Analytics allows brands to know consumers better

Deliver personalized products to meet those needs

Help consumer locate the desired product

Aid consumer in comparison shopping

Manage loyalty offers and rewards






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Mobile is the closest a brand can get to the end-consumerKEY TAKEAWAYS FROM STARBUCKS’ MOBILE COMMERCE SUCCESS

Courtesy of Apple Inc





CONTACT DETAILS

Michelle Evans | Consumer Finance Senior Analyst

[email protected]

@mevans14

Connect with Euromonitor:

www.facebook.com/euromonitorinternational

Search for “Euromonitor International Market Research Group”

@Euromonitor

www.linkedin.com/in/michelleevansmaclachlan

mailto:[email protected]

http://www.linkedin.com/groups?about=&gid=744327

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http://www.facebook.com/









Euromonitor Presentation.pdf

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