Starbucks Corp. is introducing its first order-ahead mobile application this year in Portland, Oregon, in a bid to speed up service and boost sales.
Mobile ordering will be available across the U.S. next year after it begins in about 150 stores in the Portland area, the Seattle-based company said yesterday in a statement.
“We do believe that this will increase our sales and will increase the throughput in our stores,” Adam Brotman, chief digital officer, said in an interview. “This is the beginning of a national rollout. We feel we’re going to be constantly learning and improving how mobile ordering works.”
Starbucks’ mobile-payment app, introduced in 2009, has been gaining traction, and the company said in March that it accounts for about 14 percent of transactions in its U.S. stores. The chain also has attracted customers with a loyalty program that offers free drinks, food and refills after accumulating points from purchases.
“Everyone is pressed for time and it seems like the world is moving faster,” said Jack Russo, an analyst at Edward Jones & Co. in St. Louis. “We don’t have time to be waiting in line.”
The app may boost sales by making visits to Starbucks cafes quicker and “less of a hassle,” said Russo, who rates the shares hold.
The shares rose 1.2 percent to $73.54 at the close in New York. They have declined 6.2 percent this year, compared with a 2.1 percent gain for the Standard & Poor’s 500 Index.
The first stores in Portland will allow iPhone users to order using the Starbucks app before they arrive. Starbucks will bring mobile ordering to Android users in the national rollout. Customers typically will have to wait about five minutes for their drinks and food to be ready after placing an order through the app, Brotman said.
The company has about 12 million active users of its mobile application in the U.S. and Canada, and it processes about 6 million mobile transactions in the U.S. every week, Chief Executive Officer Howard Schultz said on a conference call in July. Schultz handed over day-to-day management duties earlier this year to Chief Operating Officer Troy Alstead so he could focus more on next-generation retailing, as well as digital, mobile and loyalty programs.
For the holiday season, Starbucks is planning to sell a new Chestnut Praline Latte, its first new holiday beverage in five years, according to the statement. Starbucks also said it will sell 100 different designs of gift cards during the season.
There are about 11,700 Starbucks stores in the U.S.