This article first appeared on Global Convenience Store Focus.
In a world obsessed with customised espresso-based coffee, baristas are the people who craft personalised coffees to order for busy and often impatient customers. Highly skilled, yet in short supply, baristas are increasingly difficult to find and keep in expensive cities like San Francisco where rents can be crippling and even finding somewhere to live within commuting distance is a challenge! Yet our coffee cravings show no signs of slowing down, so one company has developed an entirely new solution to delivering our perfect personalised daily caffeine fix in the form of barista robots.
CafeX, led by CEO Henry Hu has developed the robotics necessary to replicate each of the distinct stages needed to craft the perfect hot drink – and they are proudly showcasing their solution in three high profile locations in San Francisco where such critical issues as coffee were always destined to enjoy a creative solution. Welcome to the world of CafeX and custom coffee, robot-style!
In true Silicon Valley tradition, the CafeX robot barista was conceived by three college friends and the first one was built in their garage. At the time, the team’s main concern was the time they spent queueing for coffee, firstly waiting in line, then placing the order, making the payment, and only then would the barista begin brewing. And so they began work on a solution which would completely eliminate the manual tasks, resulting in a coffee that is pre-ordered by phone or at a kiosk, then made to order by the robot barista, then bluetooth proximity beacons are used to manage the ‘arrival detection’ process and ensure your perfect customised coffee can be collected within 15 seconds of your arrival at the kiosk.
A clever key decision was to showcase the robotic technology and ensure the coffee never feels like it is simply coming from a vending machine, resulting in a truly ‘mesmerising’ process that has attracted plenty of interest from consumers since it’s debut where it won the “Best Overall Startup” award at the ‘world’s largest startup event’ in 2016.
Watch the robot in action here in its latest version – CafeX 2.0:
Key Success Factors:
While automating the task of making coffee may seem premature or even unnecessary, there are a number of compelling benefits that may see this technology take over in countries with sufficient early adopters and coffee consumers. They include:
- The CafeX robot operates twenty-four hours per day, seven days per week, with just a short daily half hour break for maintenance and cleaning.
- The entire unit is small enough to fit in limited space, with the latest version taking up just 40 feet.
- The use of robotics and locally roasted beans ensures a combination of speed, consistency and favourite flavours in each locality, with the latest machines also capable of serving four different types of milk.
- With a focus on speed for ‘grab-and-go’ consumers, the company claims that their one-tap ordering and invisible payments “reduce café wait time from 10 minutes to 10 seconds.”
Lessons and Learnings:
- Each app-based order requires a credit card payment and your mobile phone number. A PIN code is then sent to you via SMS to identify yourself and your coffee order at the time of collection.
- The CafeX robot is adding more services to cater for customer demands. Version 2.0 (as shown above) has been enhanced to include two sizes of coffee (8oz and 12oz), it can handle clear cups and can now brew cold espresso-based drinks as well as the traditional hot range.
- Version 2.0 is also incredibly fast – it’s now capable of making three coffee orders in just forty seconds.
- Cafe X Technologies has raised over $5 million in funding from venture capitalists and private investors including tech entrepreneur Peter Friel through his organisation – the Thiel Foundation. Thiel is well–known as a visionary for his early work with Paypal and as an investor in Facebook.
- While brewing coffee was never designed to be a visual experience, there is no doubt that CafeX has created a sense of theatre and coolness that appeals to a tech savvy audience who are also tight on time. In a world increasingly interested in experiences, CafeX coffee robots do offer a moment of amusement to this audience as part of their daily routine.
- Coffee is a daily ritual for many millions of people worldwide but even with a robotic solution, the human element cannot be underestimated. While the CafeX robot will never write your name on your cup, the team has designed the whole process to “make Cafe X feel approachable, warm, and human” resulting in an engaging ‘wave’ to customers (time permitting of course) as part of the overall experience.
- A recent article highlighted that over 50% of CafeX’s customers are already regulars, suggesting that the coffee and the purchase process are good enough to customers to come back repeatedly – it’s not just a novelty experience.
- Despite obvious consumer demand for the latest technology, even in sophisticated cities like San Francisco, robotics companies like CafeX are also frequently criticised for eliminating jobs, however this does deliver significant cost-savings for business owners.
CafeX Robot Barista-Brewed Coffee for Collection from the hatch
Robot-driven Profit Projections
If sales for each robot exceed 250 cups per day, CafeX claims that each site will break-even in under three months. It also claims that revenue per square foot will be more than seventeen times that of a Starbucks cafe. And while CafeX still owns and operates its sites directly, they have expressed a willingness to develop a franchise model so the numbers will be fascinating to understand as the solution rolls out both nationally and internationally.
From our perspective, we believe that many factors influence customer loyalty in our digital world – from the product itself to the overall experience, so only time will tell if our future daily coffee moments around the world will be human or robot.
Revenue Projections at CafeX Launch
Liquid Barcodes is a leading global loyalty and digital marketing technology company specialized for the convenience store and foodservice industries. Our proprietary cloud-based technology platform allow retailers to create and manage their digital marketing campaigns with a proprietary process we call the “customer connection cycle’ to engage, promote and reward customers activities in real-time across digital and media channels.
How we do it:
We have developed the most advanced loyalty and digital marketing technology platform specifically for convenience store and foodservice retailers globally.
Retailers use our self-service dashboard to create and manage loyalty driven marketing campaigns that increase purchases with their existing customers, as well as effectively target and acquire new customers through partners or paid media channels.
One core component of live loyalty is gamification. We have gamified branding, loyalty and promotions. We believe this approach is essential in order to get customers’ attention and ultimately truly engage them with repeatable actions thereby winning their loyalty.
Check out some of our exciting/proven results here:
Chief Content Officer, Liquid Barcodes and Independent Loyalty Consultant.
With over twenty-five years marketing experience, I specialise in loyalty marketing consulting, managing consumer loyalty propositions, strategy and operations. In addition to working with Liquid Barcodes, my clients have included Telefonica O2, Three Mobile, Electric Ireland, Allied Irish Bank and The Entertainer, as well as Avios – the global points currency for some of the world’s top airlines. I am also a judge for the Loyalty Magazine Awards.