It takes all of us to beat national chains
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).
The Starbucks / Dunkin' formula
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:
- Consumers must be able to trust their order will be ready when they order ahead.
- Consumers know there is always a location nearby.
- Consumers earn points towards rewards every time they order.
- 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.
Invariably, branded apps die in the app store for a reason
The app store is littered with branded apps with 2 star ratings (if any at all) and no one looking if someone decides to use it. However, it's not just a poor consumer experience that kills these apps - the tech doesn't fit for coffee either.
Because the vast majority of branded app platforms are built for restaurants they muck things up when the are faced with coffee-specific workflows. Below, we've listed the key pitfalls for the three major providers of branded apps and why for coffee- it usually doesn't work out.
- 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).
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 away from national chains and give your business the opportunity to not just retain, but grow same-store revenue growth by better serving your most loyal customers.