Starbucks Execs Respond To Square Criticism: Innovation Is Messy

"We just thought a lot of people would come up and say, 'I'm going to pay with my phone,'" says chief digital officer Adam Brotman. "We didn't realize a lot of customers were going to come up and say, 'I'm going to pay with Square.'"

Yesterday, after chatting with Starbucks chief digital officer Adam Brotman and payments VP Ryan Records, I headed to a nearby store for a pick-me-up. As I walked up to the register at a Starbucks in lower Manhattan, I took out my smartphone, told the barista I'd like to pay with Square, and then scanned my iPhone and walked out. It was seamless. Easy. And took less time than for the customer in front of me, who fumbled with quarters and had to wait for change when paying for her coffee.

The slick experience is the promise of Square, the mobile payments solution that enables merchants and consumers to accept payments and purchase items via their mobile devices. Founded by Jack Dorsey, the startup's service is already very popular with small businesses. But over the summer, the company announced a wide-ranging agreement with Starbucks to handle its debit and credit card processing. Starbucks also invested $25 million into the startup, and in November, began accepting payments from Square's mobile Wallet app at its 7,000 stores. The companies received glowing press coverage for the announcement.

But in tests at a number of Starbucks stores in recent months, Fast Company learned that the experience of using Square Wallet at Starbucks is anything but polished. Though the payments option worked seamlessly at a handful of locations, on the whole, we found the experience to be awkward, buggy, and inconsistent. Worse yet, we found that the Starbucks baristas (and even some store managers) had little training for how to use the service, and were almost as confused about how the system worked as the customers themselves. In a postmortem of our reporting, Brotman and Records, the Starbucks executives, said that mistakes are not uncommon when introducing such a new platform at scale. "We don't want to wait on innovation," Brotman explained. "Because if we waited until we could make it perfect across every single experience of every single store, we would have to move much more slowly for the vast majority of our customers. So we've taken an approach that's not always perfect, but we think it's the best thing for our brand and customers."

During our tests at a slew of Starbucks stores, many baristas had trouble figuring out how to accept payments with Square. It was surprising, especially given that the solution is so similar to Starbucks' own mobile app, which is very popular and also requires scanning QR codes. But the similarity between the payment options also could be a source of confusion. "To some extent, we made it too easy: We made it the exact same process to accept [payments] on Square as with accepting mobile payments from our app," Brotman said. "When we designed this originally, we just thought a lot of people would come up and say, 'I'm going to pay with my phone.' We didn't realize a lot of customers were going to come up and say, 'I'm going to pay with Square.' In which case, we needed to have this training in place. We're putting in place measures right now to do a better job of getting that information out to the stores."

We received a decent amount of feedback on our piece. Some said they had no issues paying with Square at Starbucks, and suggested our sample size was too small. Others said they had experienced similar troubles at Starbucks when paying with Square Wallet, and indicated that Square's problems extended to local merchants too. Whatever your reaction, there's no doubt the system is imperfect. Imagine trying to buy an item at an Apple store, and finding that the clerks there were unable to accept payments properly. Now imagine if that experience repeated at multiple locations, just blocks away.

Brotman said that there have been issues with scanner calibrations, which may have affected Square Wallet payments. He also brought up the distinction between licensed Starbucks stores and company-owned locations. Roughly 70% of Starbucks stores are company owned, and only these locations accept Square payments. Licensed stores do not accept payments. Though this was an issue for only one of our tests, it does represent another headache for the company, considering customers have no way of telling the difference between a company-owned Starbucks location and a licensed one. "When it comes to our current mobile payment process, including our rewards process, it's not 1,000% consistent across every single one of our Starbucks stores, whether licensed or company owned, and that's something that we're not okay with," Brotman said. "It's a challenge we take very seriously."

Ryan Records, the payments VP, said the company has gone through similar issues before. "[This] reminds me a lot of when we first launched mobile payments and spent the first few months figuring out how to fix everything," he explained. "We were solving one [problem] after another, and we probably had more misses than hits before we reached a tipping point. But then it became seamless, and it became flawless, and it really became an elegant way to pay."

It's an interesting approach, which entails almost a brute-force attack on the service's problems until the company gets them right. Anyone who has experienced Microsoft's constant software updates for Windows, Office, or Word is likely very familiar with such a product strategy. "It's not always the most stress-free way to launch and scale, but it's the fastest," Brotman said. "We're willing to do that. We do not want to sit on our hands. If we feel excited about something, we'll get it out there, learn our lessons, and then correct the mistakes. That helps us be a leader."

The problem, ironically, might be that not enough consumers are using Square Wallet. Though Starbucks declined to share Square usage data, at least one study has indicated adoption is low. The more customers that come to use Square, the more they could act as an educational force for baristas. Both Records and Brotman referred to this moment—when consumer adoption of Square reaches critical mass—as a "tipping point."

"You're trying to roll out a completely new behavior across 100,000 baristas and 7,000-plus stores," Brotman said. "The more customers that use it in an area, the more comfortable the baristas are going to be. I think if you were to graph seamlessness and barista understanding it would probably track high with early adopter areas."

He added, "We now have to work through the barista and customer education issue, and it's not easy. But we're committed to doing it, and 100% committed to Square."

[Coffee Spill: ifong via Shutterstock]

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