Chief Location Officer News: Last week Starbucks rolled out a system that allows users to pay with their smartphones because the smartphones are where the users are. CLO Recommendation: If you are a consumer app vying for mindshare, consumer wallet, and brand appeal, you need location.
Starbucks took a big step in m-commerce last week by making it possible for users to pay with their smartphones instead of credit cards and cash. To use it, just download the Starbucks Card Mobile app and swipe your iPhone, iPodTouch or Blackberry in front of the reader. The purchase is deducted from your pre-paid Starbucks account. That’s trenta-sized convenience for customers.
Why did Starbucks set this up? According to CNN, “because customers have requested the option and…frequently use their smartphones while waiting in line…the company also believes that its customers carry their mobile phones more often than a wallet or purse.”
Message to customers: design your own drink, and your own payment system.
Last year I was on the Grande No-Whip Low Fat White Chocolate Mocha diet. So far this year I've switched to the Grande Non-Fat Latte and have lost four pounds. With this new app, I could ditch my heavy wallet and lose another pound.
This is just the cream in the coffee of mobile commerce. Overall, mobile commerce shows 86% year over year growth. It’s growing, and it’s here to stay. As customers move from content-based to usage-based apps, mobile commerce becomes more important. Starbucks users pay via pre-paid accounts, but other users are paying using existing services, with PayPal and Apple iOS in a dead heat.
But this is just a start. Adding more location intelligence to your app could tell your barista to start to make your favorite drink before you enter the door. Instead of waiting in line and then picking my Grande Non-Fat Latte up at the bar long after I pay, it could be right there on the counter, warm and waiting when I walk in the door.
What about customers with feature phones (still 81% of the market)? LOC-AID can get them their lattes too, using network-based location instead of GPS.
LOC-AID can provide the location information to make these apps a reality: guaranteeing security, privacy (we adhere to the strongest privacy framework), ubiquity (we support feature and smartphones) and convenience (customers don’t have to download apps after opting in).
Do you want whipped cream with that?
Related articles: http://edition.cnn.com/2011/TECH/mobile/01/19/starbucks.payment.mashable/index.html?iref=allsearch http://edition.cnn.com/2011/TECH/mobile/01/20/starbucks.mobile.app.gahran/ http://www.mobilecommercedaily.com/2011/01/25/mobile-commerce-fastest-growing-app-monetization-model-study