Lab Notes

How Technology is Reshaping the Coffee Retail Industry

It was not long ago when cutting to the front of the line for your cup of coffee would have gotten you a dirty look, or worse, a swift elbow from a stranger. But today, skipping the line is not only encouraged; it’s rewarded. As the coffee retail industry tries to meet the demands of its growing consumer base, it’s also trying to deliver effortless simplicity, consistency and speediness to every transaction.

Coffee’s popularity shows no signs of slowing. With Americans consuming 400 million cups every day, coffee is not only a beverage but an unbreakable thread woven through the fabric of our culture. Worth an estimated $30 billion, industry heavyweights and independent coffee houses alike are in a fight for a larger piece of the pie. Similar to other retail and service industries, this means leveraging technology for convenience, speed and personalization.

Here we highlight three ways that coffee retailers are utilizing technology to innovate today, all of which are also happening across retail.

Beacons for personalization

Last year, Starbucks began using Apple’s iBeacon technology in its premium coffee stores, bolstering an already impressive mobile strategy. Using the technology to send information about their freshly brewed coffee, Starbucks is serving their premium customers who care about the story behind the coffee. Beacons use short-range, low-energy Bluetooth transmitters to send alerts to mobile devices nearby and trigger contextually relevant messages to consumers near participating stores. When a consumer walks into a participating retailer, the store’s beacon will communicate with their phone and tell him or her about specials, discounts or coupons.

Whether or not this technology will influence people to cross the street for their coffee, purchase more products from retailers or tune out all together, has yet to be determined. Starbucks is unique in that it already has a highly engaged mobile audience. Brands with less mobile marketing experience should tread lightly with beacons.

Messaging apps for speed and convenience

While they are the most noticeable, Starbucks is far from the only coffee retailer experimenting with new mobile technologies.

“SMS marketing and message-based ordering have been successful ways to interact with customers,” says Alan Krohnke, Co-Founder of both Tiny Footprint Coffee and Roastery 7. “It’s a faster and more personalized way for them to connect with their customers.”

Learning that local coffee shops are now experimenting with messaging commerce on their own indicates that the massive potential of these apps may soon be realized.

Globally, the messaging app market grew by 103% during 2014, according to Flurry, a mobile analytics firm. Today, about 2.5 billion people are registered to use at least one messaging app, according to advisory firm Activate. It is likely only a matter of time until more messaging services are fully equipped for commerce worldwide. When you combine all of these forces, it’s easy to imagine messaging your local coffee shop on your way out the door to start preparing your favorite drink.

Connected devices for precision and consistency

While the discussion of what makes a great cup of coffee can spark a fierce argument among coffee retailers, there is little debate that consistency is paramount when building a customer base. Humans are good at many things but consistency is not one of them. Digital innovation in coffee retail devices is happening in two competing ways; enabling the barista to be more consistent or replacing the barista altogether.

“Traditional or manual pour-over brewing methods that have been around for decades are really in fashion now,” says Skip Fay, Co-Founder of Dunn Brothers Coffee which boasts 87 locations in nine states. With manual coffee brewing, the barista is in full control of all the variables; coffee quantity, the ground up coffee bean particles, the amount and temperature of the water, and the length of time that the coffee and water remain in contact.

“If you’re lucky enough to have 500 people coming through your doors, it is difficult to serve coffee one cup at a time,” adds Skip. “Technology is allowing the speed of delivery of those methods to be convenient and consistent.”

Smart kettles, app-assisted manual brewers and connected scales, like the Lunar from Acaia, have hit the market. With the Lunar connected to their new app Brewbar via Bluetooth, coffee shops can track multiple brew devices, aggregating brew data to better measure the level of consistency they are delivering to their customers.

Products like the Lunar are meant to make humans better at what they are already doing. Fully automated kiosks, like the cloud-connected Briggo Coffee Haus are not.

Still in test mode, the Briggo Coffee Haus is a robotic kiosk capable of giving each customer their own personalized drink at the touch of a button. Founded by former technology and finance executives, Briggo enables customers to order their drinks from an app and pick it up later, or simply walk up to its touchscreen controls to order their drink. If successful, a customer would be able to access their favorite drink and have it taste the exact same from any location in the world.

A Bright future

Some argue that new technology detracts from the craft, ritual and sociability of coffee. The good news is that there is still a growing number of low-tech, slower and craftier specialty coffee shops. The coffee world is not all robots and signals just yet. Whether your ideal experience is to trigger a beacon that notifies a robot to make you the same cup of coffee each morning or risk inconsistency for a four-minute chat with your barista, you may soon be able to have both.

Dan is now the Founder of Kindly Coffee where he is aiming to redefine office coffee. He is also a freelance writer, covering technology's impact on traditional businesses.