Wednesday, August 14, 2013

Starbucks’ New Brew: Faster Digital Customer Experience

Today, Starbucks Coffee Company has become almost as well known for its free WiFi as its coffee. The $13.3 billion company provides a model of combining a physical retail operation with digital channels. It has more than 34 million Facebook likes and more than 3.6 million Twitter followers, and is successful at using social media and mobile technology to create unforgettable customer experiences. 

In fact, recently Google and Level 3 Communications have partnered up to provide wireless service at Starbucks U.S. locations. The new Google WiFi will initially be seen at new locations over the next month and then be rolled out to its remaining 7,000 locations across the country over the next 18 months. According to Level 3 CEO Jeffrey Storey, the company is working with Google to provide Starbucks with a differentiated experience for customers.

“We will do the things that we do best – building and managing complex network services to support that infrastructure. And, Google will do the things that they do best and make sure that they provide a differentiated WiFi experience that they will at some point, use that portal and that interface to, for example, offer seasonal drink coupons to the customers as they walk in,” he told

Starbucks Chief Digital Officer Adam Brotman said it’s the next step in the relationship between the coffee giant and Google. Currently, Brotman is responsible for delivering wider digital thinking at Starbucks, which is key to its customer experience (CX) strategy.

“From the digital perspective, we spent the past several years building an engine of digital touch points with our customers that not only allows us a deeper relationship with our customers, but also pays off with incrementality for our business,” he commented.

A critical tool for Starbucks is its loyalty card program which has seen a 100 percent year-over-year growth in dollars loaded via Starbucks mobile apps and Web properties.  Over 10 percent of all transactions in U.S. stores are made via mobile phone, according to Brotman. So, mobile devices have become important part of the CX as the fastest and easiest way to pay in stores and will continue to bring more innovation into the space.

“One of the things that’s allowed us to get a lead in mobile payments is that we did not try to go for example, right to the cloud or right to some sort of tap to pay, although we do plan in the future on implementing whatever is suited and most convenient to our customers,” he added.

Additionally, Starbucks recently passed almost four million Twitter follower mark, and while its global Facebook following allows the firm to engage with our customer’s every day, “Our internal measures tell us that these digital initiatives have added demonstrable impact to our US business with the promise of even greater growth in the months and years to come. We are not resting on any of our previous successes,” said Brotman.

To date, Starbucks has a robust pipeline of developments in each area of its digital ecosystem and it expects to deliver a number of improvements and innovations through its existing programs and introduce new concepts. For instance, one new initiative is a partnership with Duracell to trial wireless charging for our customer’s mobile devices in select Starbucks stores in Silicon Valley. The installation of multiple wireless charging Powermat services in our stores will allow Starbucks customers to easily recharge their smartphones.

Brotman said, “This is a kind of improvement to the digital experience that our customers expect from Starbucks and the kind that we will deliver at scale moving forward.”

Furthermore, Brotman said work is underway to accelerate the digital strategy globally. China, for example, already has 2.5 million My Starbucks Rewards members without a mobile payment platform or eGifting in place. The company has even made mobile payment available to apps on Android and iOS to Starbucks customers in the Hong Kong market.

“I truly believe that no other retailer is as far along as Starbucks in terms of building an end to end digital customer experience across a variety of digital touch points both in-store and out of store, across channels, and now across geographies,” Brotman said. “We are truly only just getting started.”

Amanda Ciccatelli, Social Media Strategist at IIR USA, has a background in digital and print journalism, covering a variety of topics in business strategy, marketing, and technology. She previously worked at Technology Marketing Corporation as a Web Editor where she covered breaking news and feature stories in the tech industry.  She can be reached at Follow her at @AmanadCicc
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