This morning, while putting gas in my car, I pulled out my mobile device and placed a mobile order for a Venti Latte (1% Milk and No Foam) with around 5 button presses on the Starbucks mobile app. When the gas was filled, I jumped in the car and drove 100 yards to the nearest Starbucks (I live in Los Angeles, after all…) and walked past a line of 18 people transfixed by their mobile devices while standing in line to grab my coffee that was just popping up on the counter. I still don’t get it. How can so many people not be using this great piece of technology?
What Starbucks has done – and Dunkin Donuts is following suit – by advancing a use of an app that is absolutely helpful in getting through your day rather than just being an occasional doldrums distraction, is a model for companies of all verticals to follow. By utilizing connectivity and UX in a hyper-intuitive way, they have not just made lives easier for people who only have the time to jump in and out for a coffee, they have used the available technologies to increase loyalty and gain an even stronger source of data to make their customers happier while boosting business practices. *Starbucks also gains a huge financial advantage as the customer has to have a balance in their app in order to participate – allowing the company to take on a huge amount of capital before they have to deliver the goods.
We’ll have to see if their latest program marrying the mobile ordering component of their app with a delivery service delivers the goods that can scale. The great and innovative learning in this is they are piloting ideas that take industrial knowledge one step further to keep moving forward. I don’t know how many people will want to pay a multi-$$ surcharge for a cup of coffee to be delivered, or how many markets it would actually work in. But, if they can figure out how to provide the service in areas that make sense and are profitable… even better.
Of course, once more of the world catches on to the mobile ordering and goes straight to the counter, Starbucks will have to figure out how to deliver on greatly expanded expectations. But that’s a good problem to have. Until then, I’ll continue to enjoy walking past the line at the register while shaking my head in wonderment of when more people will make the jump.
Posted in Brand Experience, Core, Innovation, Marketing, Product Development, Ruminations, Strategy, User Experience
Tagged Consumption, Dunkin Donuts, Expectations, Mobile, Profits, Sales, Starbucks
Once upon a time, there was a coffee company that became huge and started to expand both in locations and offerings beyond anything one could have imagined. With the feeling of being offered a record with every coffee or a Latte with the purchase of a thing-a-ma-gig, it was absolutely getting out of hand. And that was without wondering what the mermaid was all about. Things were a mess – until Howard Schultz rode back into the CEO position. Quite immediately, he brought the company’s focus back to coffee and everything was grand – with a best-selling book to espouse his theories. Thus was the legend of Howard Schultz and his leading of Starbucks back to huge profitability. But with time, things change – even if the time is incredibly short. The recent twist to the story is the announcement in January that Starbucks was rolling out beer and wine sales at some stores, and just yesterday, the news that they will be opening up a line of fresh juice stores under the Evolution Fresh Juice moniker. The thought of history repeating itself at Starbucks leads to a wee bit of royal head scratching.
The concern is that expansion was what got them into trouble in the first place. Many felt that they were spread too thin and trying to do too much. Certainly, yesterday’s announcement about launching the line of Evolution Fresh Juice stores is a tad different because it’s a completely different line. But, the expansion of alcoholic beverages within Starbuck’s stores beyond one location in Seattle is a beast in and of itself. To have these recent expansion announcements at this time could seem to be too soon. Especially after the restructuring was so big and successful.
The prospect of a coffee shop is more acceptable as a business decision because of the huge market for it. Starbucks’ management points to the $50B world of health and fitness as its reason for entering the industry, but I can see the stronger proposition being just the release of packaged juice drinks. Does it make sense to open up stores just selling the juices? They are starting out on the small side with one store in Seattle and will see where they can go, but it will be amazing if they can get this baby to stick as a large series of stores.
On the other side of the equation, greatly expanding alcoholic beverages to more stores is questionable. To me, it too does not make sense to branch out after such a big to-do about moving back to your core. Foods are selling well and that makes sense because they go with coffee or they are convenient pick-up items. But a glass of wine or a beer? interesting…
It is understandable that Starbucks wants to – or actually needs to – expand because that’s the way things go. But, they’ve just got to do it the right way. I agree with the general consensus that we’ve got to give Schultz the benefit of the doubt in pulling this off, but is it all just too soon after their not-too-distant past issues?
Starbucks could be the ones who can launch any beverage platform. But as a big fan of the brand and the product, I’m hoping they prove my concerns about the kingdom getting too big and crumbling again to be wrong.
Howard Shultz sent an email out this morning and it was not about Starbucks Coffee, of which he is the CEO. I’m assuming that open letter came to me via my personal email account because I am on Starbuck’s email list as a rewards member. It certainly pushes the boundary on what CRM can and should be used for.
Regardless of whether I agree with what Schultz wrote about – a campaign he started weeks ago attempting to break the political gridlock in Washington by recruiting companies to join him in cutting off campaign contributions until they start working across party lines to ensure the country’s success moving forward – the platform used to share the statement brings up a number of questions:
- Does a company have a right to use their CRM/Emails as a platform for non directly related business communications?
- Can they assume that their customers want to hear what they’ve got to say?
- Is there going to be an inordinately high number of unsubscribes – and did they consider that before sending?
- Will this be the start of a trend?
Many of these are effectively rhetorical as there are a number of variables depending on the message, the audience and their relationship with the company sending the message. In terms of the trend question, it seems like this might be a new version of the full-page newspaper ads that were bought for open letters in the past. But this didn’t carry that weight as none of the 100 other businesses Shultz mentioned were actually named.
Only time will tell whether this was a reasonable use of CRM and what kind of ramifications it has for Starbucks and others. I’m still undecided whether it is a good thing or not as it highlights even further the power companies wield on government vis-a-vis campaign contributions or political platforms.