Luckin Coffee's Digital-First Strategy to Beat Starbucks

A new coffee shop chain in China is capitalising on the consumer demand for hyper-convenient service and is even stepping on the toes of global giants, Starbucks. What’s its USP? Paperless, digital menus and strategic, en-route locations.

Luckin Coffee, which launched in November 2017, opened 500 coffee shops within its first five months, after receiving a healthy $150 million of funding. The company strategically placed its outlets in high footfall locations, where customers were more likely to want coffee, fast. In fact, half of Luckin's outlets act solely as delivery hubs - enabling staff to deliver the caffeinated-cargo within the promised 30-minute delivery time. How then, do staff receive the orders?

Luckin Coffee is one of the first chains to go completely paperless. This means no menus and… no cash. All orders are placed and paid via the Luckin app. Orders are then delivered to the customers requested location or collected in store. The effect on overall business efficiency is profound, and it’s good for the environment:

• No menus to design, print, replace and update.
• Instant updates to all menu items and pricing
• Transactional data on every purchase – which over time, can produce powerful insights for strategic decisions.

Starbucks

Starbucks currently has 3,300 outlets in China and have plans to open a further 2,700 by 2021 – mainly to compete with growing competition from expanding coffee houses and fast-food outlets such as KFC and Pizza Hut. In the past Starbucks has focused on providing a superior offline experience but have since increased their digital offering to be able to compete with coffee houses like Luckin. Starbucks already has a large presence on WeChat but have recently partnered with Alibaba to create a new retail experience that offers interactive menus powered by augmented reality.

Watch a video of Starbucks biggest and most interactive location in Shanghai here.

 

Tackling Transient Customers

With no cash transactions, and no option to order outside the app, you could argue that Luckin’s model neglates the transient customers. This is of course, not their target market, but with a cloud-based solution, such as wi-Q, it is possible to engage with both.

wi-Q is a revolutionary, cloud-based ordering solution, designed for F&B outlets. It has been built and developed under one, unswerving development philosophy – to simply remove as much friction as possible from ordering and purchasing F&B. This means there is no app to download and no registration required for purchase. The consumer journey looks like this:

1. Scans QR code from inside the venue or types short URL from outside the venue to reach mobile first, menu.
2. Selects product for ordering – filtering by dietary requirements if necessary and adding custom order notes.
3. Pays via PayPal, Apple Pay, Cash on Collection, or even Charge to Room within a hotel environment – the payment possibilities are vast.

wi-Q not only enables a hyper-convenient service but also enhances the customer’s digital experience by providing multiple language options, multiple payment options, advanced product filtering, dietary options and a fully branded and customised user interface.

If you would like to find out how your coffee shop, F&B outlet or hotel could offer a fully POS / PMS integrated, cloud-based mobile ordering solution on a low cost SaaS pricing model, please Get in Touch today.