Why a branded app isn't the answer for coffee shops competing with Starbucks mobile ordering

his article is part of an ongoing series on superior service for coffee shops. To enhance your own customer experience, get started here

Background

Indie coffee businesses of all sizes are realizing they need a solution to compete against the convenience of mobile order ahead, payment, and rewards from corporate chains like Starbucks, Dunkin' Donuts and even McDonalds. Mobile orders made up 30% of all Starbucks transactions in 2017 and the ability to order ahead is making even the most loyal indie coffee lovers begin settling for coffee they don't love.

For many specialty coffee shops, especially the more established brands with 15 or more locations, a branded app can seem like the perfect counter-punch to what Starbucks offers. But when you consider the experience from the consumer point-of-view, it is clear even the strongest indie coffee brands can't compete with Starbucks alone on the elements required to provide a great customer experience (consider this foreshadowing about how we can do it together).

Why indie coffee-lovers prefer the Starbucks app

The biggest reasons most branded apps fail is simply because they don't retain enough users to maintain a steady stream of transactions over time. To have a chance of being successful, coffee shops would need to commit to aggressively and consistently advertising the app (and the app is often sub-par in tech and never a fit for the coffee category) because there isn't enough perceived value for users to open the app every day.

Setting cost and app experience aside, indie shops and chains simply can't deliver on what we call "the four pillars" of a great experience for coffee-lovers alone. Starbucks is able to keep customers coming back every day because they deliver on all four of the following:

 

  1. Consumers must be able to trust their order will be ready when they order ahead.
  2. Consumers know there is always a location nearby.
  3. Consumers earn points towards rewards every time they order.
  4. Consumers can redeem rewards anywhere.

Nobody can compete with Starbuck's footprint. The trust that there is always a shop nearby not only keeps the app relevant in every context (home, work, weekends, etc.), it makes the rewards even more valuable. 

This is why joe takes the approach on building an indie coffee network and why we build for coffee-specific experiences on both sides of the transaction. From the ability to fully customize a drink once, re-order with a single tap (a quarter pump of liquid sugar in your half-caff, hemp latte with two straws anyone?), to making life easy for baristas to receive orders even when it's hectic behind the counter - our focus is creating value around coffee-specific experiences. 

What your branded app developer isn't telling you

Let me reiterate that branded apps sound like a great idea. But the reality is that there are hundreds of dead apps that scatter app stores like tombstones in a graveyard. Yes, they fall short on the consumer experience for the reasons mentioned above, but that isn't the only reason they're unsuccessful. 

When you dig in a bit, it is easy to find evidence of issues rooted in the technology - app reviews are non-existent or riddled with negative comments, customizing a drink allows things like "adding a pump of Breve" because the platform wasn't built for coffee, and often times you can't advance to check-out because the user flow is too broken and the code breaks completely. Here's why: 

 

  • Custom-built apps cost more than the initial sticker price. The initial build of an app is just the beginning. The real cost comes from the ongoing maintenance every time the app store makes a change, iPhone comes out with a new device, or the mobile web browsers release an update and breaks some existing code (Chrome does one every 45 days or so). When the app inevitably breaks following an update to iPhone, Android, or another technology used to fuel the experience, owners don't want to invest even more cash in an app that isn't making them much money to begin with (for all the reasons we discussed above). Hence, another dead app in the app store. 

 

  • Most branded app platforms are built for restaurants. We won't name names, but every other platform out there (branded app or not) was built for the lunch and dinner crowd and with restaurant workflows in mind. These companies have a product they try to re-skin, slap your logo on, and call it a custom branded app. The problem is restaurants don't build their business on regulars that order a highly customized drink every day and can't afford to be slowed down. The coffee workflow is so different on both sides of the transaction that when a solution isn't tailor-made for the category, you end up with unhappy customers, angry baristas, and a screwy app that everyone would like to forget. 

 

  • POS providers don't focus on mobile. Even coffee-focused POS miss on building a consumer experience. Not necessarily because they don't have the chops for it, but because it's secondary to their core business. If you don't obsess about making the consumer experience amazing and work every day to innovate, it's not going to beat what Starbucks offers - plain and simple. You don't have to take our word for it. Use the Starbucks app or the joe app then use a branded app built by a POS. They tend to be clunky, have poor user flows, and the modifiers are often built for baristas that know exactly how to construct a drink (consumers tend to make more mistakes without guard rails built-in). 

How to level the playing field against corporate chains 

 

Anthem Testimonial - Why Joe_

 (Co-Founders and former baristas, Nick & Brenden Martin discuss mobile ordering and superior service with the CEO of ANTHEM Coffee Company & the ANTHEM Coffee School, Bryan Reynolds.)

Together, we can not only compete on the experience that Starbucks offers - we can beat it. You know your customers, not only by name, but by drink. You know their stories, how long they've lived in the area, and that their kid has a piano recital this weekend.

Going the extra mile for your customers and offering GREAT coffee has fueled indie coffee success for decades. By coming together under the joe app, you help keep coffee lovers off the Starbucks app and give your business the opportunity to not just retain, but grow same-store revenue growth by better serving your most loyal customers. Why would they settle for coffee they don't love when they can open joe and give their business to a nearby indie location?

Worried that you'll be losing customers to other indie coffee shops?

Don't be. Our data shows that our users patronize the same 1 or 2 coffee shops most of the time. You're part of their daily ritual, after all. In fact, we are constantly adding new features to make it easy for your regulars to order and reorder at your shop every day.

For example, after your customer orders once, the next time they open the app it opens directly to your store. Complete with a branded cover image, custom descriptions, and a fully customizable menu and modifiers (that are built specifically for coffee!), your customers can re-order their daily drink with one tap - and that's just the beginning. 

Our partners are growing their business through joe

Within 45 days, we've seen partners that promote the app increase their revenue $9K/month or more thanks to more frequent purchases from customers, larger average ticket sales (joe transactions average over $8.50), and more foot traffic (surprise) thanks to shorter, more efficient lines making more room for passerbys. Even more importantly, once our partners build a base of customers, the daily transactions don't drop off - they increase over time. At no extra cost to your business, there isn't much you have to lose by signing up. 

Join the movement to level the playing field against corporate chains, enhance your relationships with customers, and grow your business in the process. 

For a better understanding of how and why our partners are succeeding with joe, check out a few of our success stories: 

 

To join joe today, sign up here.

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