As the chairman of the board of directors at Yahoo, Webb constantly runs from meeting to meeting, rarely taking a moment to pause during his busy days. And when he does consume coffee, he takes it black and served in a portable cup.
So why has Webb of all people invested in San Francisco-based Philz Coffee? Sure, coffee is one of the most widely traded export commodities in the world. And since the emergence of coffee’s second wave in the 1980s and the third wave in the 1990s, specialty coffee has become serious business with growing retailers like Blue Bottle, Stumptown, and Philz eyeing new markets. But what has convinced a busy technology executive and angel investor to sink money in the café business, his first non-tech private investment?
Webb gives a few reasons for his decision: he prefers the flavor of a cup of Philz to most of its competitors and the entrepreneurial story of the company’s founder, Phil Jaber, resonates with him.
But it’s Philz early adaption of preorder apps that has earned Webb’s loyalty.
“Ordering ahead is a godsend,” Webb explains, “because I would not otherwise have the spare time to wait for the coffee.”
Philz Coffee uses OrderAhead, an online and mobile app, to let its customers preorder and pay for beverages in advance so they can skip the line and pick up their drink without ever speaking to a barista. There has been a lot of discussion among coffee professionals about the impact such technology could have on the specialty café experience—especially since Starbucks launched a preorder service of its own. Some indicate it is the inevitable wave of the future. Some raise questions about quality of service. And a few dismiss preordering out of hand.
No one seems to agree on what the emergence of mobile preordering and payments will mean for independent retailers and how the technology could transform the business of serving coffee.
For Nathan Wyss, a roaster-retailer also based in San Francisco, preordering apps like OrderAhead, Square Pickup, and ChowNow are the wave of the future. “It won’t be long before the majority of orders in fast-casual food service are done through preorder,” he says, “and it doesn’t matter whether we’re talking coffee or burritos.” As the co-owner of Contraband Coffee Roasters, Wyss bases his assumptions on the growing number of his company’s orders that have come through OrderAhead. “It’s an ever-growing percentage of people using preorder apps,” he says of Contraband, though he says that it currently amounts to a small number of regular customers.
Wyss seems to believe that it’s customers like Webb—a small group of early adopters—who will lead the movement, and soon preorder apps will find deep market penetration. “The trend of automation is neither good nor bad,” he says. “It’s inevitable.”
So far, preorder apps have had little impact on the way Contraband does business, though the shuttering of several preorder apps has slowed the pace at which these services may catch on. “We’ve used three different preorder apps over the past four years, some congruently,” Wyss explains. “Two of the three ceased operations after a short time. None of them are perfect; they all have issues at the customer end or the barista end, or both ends. But there’s such a small amount of preorders done that they have little impact on drink prep.”
However, Wyss predicts that this may soon change. He thinks coffee shops of the future will soon resemble self-serve frozen yogurt shops that accept a majority of their orders through mobile devices. And he credits this to the nature of the market. “No matter what, businesses will always want to give the best customer experience for the least amount of money with the highest profit margin, all while adjusting for the variables of the target market and product,” he explains. “To that end, all tools are on the table.”
Still, not all coffee professionals are convinced that preorder apps are yet capable of providing a seamless, quality customer experience.
“This is not a brand new concept,” says Matt Milletto, co-owner of Water Avenue Coffee in Portland. So far, Milletto has seen no reason to use a preorder app at his coffee shop, but he has considered the potential for the technology. “Mobile ordering and mobile payments are the way of the future for quick service,” he admits, unable to ignore the fact that when Starbucks chose Portland as the first trial market for its preorder service, they advertised the service with a huge billboard crowning Water Avenue’s building.
Philz Coffee uses OrderAhead to let its customers preorder and pay for beverages in advance so they can skip the line and pick up their drink without ever speaking to a barista.
“It’s a sign for sure,” Milletto laughs. “But for coffee, we have different quality concerns than with someone serving food.” He points out that a sandwich or burrito does not have the same made-to-consume priority that coffee does.
It’s easy to raise concerns over the quality of drinks purchased through preorder apps due to the time they could sit on the counter before the customer arrives. Square’s first, short-lived preorder app (the now defunct Order) featured a geolocation-based trigger to ensure the drink was fresh upon arrival, but most preorder services don’t currently include such a feature, leaving quality to chance.
Square Pickup, the company’s most recent foray into preordering apps, does offer mobile notifications so customers arrive on time. Starbucks, on the other hand, promises to remake any drink that’s not to the customer’s satisfaction, but that would seem to offset the time saved waiting in line.
Milletto doesn’t dismiss preordering services out of hand, but he advises independent retailers to take care in approaching new technology to ensure customers are informed, staff are properly trained, and that a system is in place to ensure a consistent experience.
Even new retailers planning for launch should think about how incorporating preorder technology will affect their workflow, both now and in the future.
This is the approach Jonathan Felton is taking as he plans to open a specialty café in the small college town of Frostburg, Maryland. While he’s just in the early phases of securing funding and selecting a location, he’s already begun considering how such technology could appeal to his target audience and impact his menu.
“I have high hopes for a service like OrderAhead,” Felton says, “although I do see a few potential problems.” He acknowledges that preorder apps could threaten the social component of a specialty café—one where the community interacts with baristas and learns more about the craft. But he recognizes that a segment of his market wants good coffee fast, and he doesn’t want to alienate that audience. Felton believes a preorder app could fulfill this niche purpose.
“The most exciting possibility for me with this concept is serving coffee unadorned,” he says. Felton explains that he wants his café to focus on serving pour-over and french press in lieu of drip coffee, but he’s aware that neither of these slower brew methods would be convenient for morning commuters rushing into the office. “Minutes matter when you have to get to work,” he says, “but I want good coffee—our good coffee—to be a part of your life, even when you’re in a hurry. We hope that apps like OrderAhead can allow us to give you exactly what you want, promptly.”
And that’s the promise OrderAhead, Square Pickup, and ChowNow make to food and beverage retailers on their websites. But if debate within the coffee industry is any indication, many questions still remain unanswered about how preorder apps could affect the customer’s experience. New retailers needn’t dismiss such services out of hand, but veteran retailers like Milletto advises to proceed with caution.
“It’s all about timing,” Milletto says, indicating that the technology is still young and the software potentially buggy. “Every small change to the customer experience needs to come with a lot of thought. A single-shop retailer needs to be confident these changes improve that overall experience,” he concludes. “So much of it still comes down to good customer service.”
—Jon Shadel is a lifestyle writer Portland, Oregon, and the travel editor at MEDIAmerica, publishers of Discover Portland, Travel Oregon, Oregon Coast, and other visitor guides.