Tag Archives: Starbucks

Say It Ain’t So! More Great Cup ‘a Joe Tech?

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.

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Does the Starbucks Kingdom Expansion Lead to Some Head Scratching?

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.

Stark Opportunities For Companies To Help Pay It Forward

Last night, I was given the option of “rounding up” on my bill at Lucille’s Smokehouse Bar-B-Que as a donation to charity – and I jumped at the opportunity. In addition to being thankful for being given the opportunity to give, I wondered if it is helping from a business perspective as a builder of loyalty.  It seems to play no part in their marketing as an opportunity to draw in new customers, but what if it did?  Looking at this and some other recent opportunities to pay it forward – like Jonathan Stark’s Starbucks card – poses the question of whether establishing or promoting simple ways to pay it forward can make a difference to a company’s bottom line in a positive way.

Round It Up America is a program that works with companies to allow customers to effectively and easily donate some change with every purchase.  The program was formed by the chain, The Yard House, in 2009 and has been slowly adding other restaurant partners since then.  They are currently represented through seven restaurant chains in roughly a dozen states.  It seems like a strong program that benefits the local communities where the restaurants are actually located with a reserve kept for national emergencies. I couldn’t find any proof that any of the chains were actively promoting the partnership beyond the mention on the receipt, inclusion in a simple press release or listing on Round It Up America’s site. 

I came upon the opportunity by accident and felt good about giving the money – perhaps forming a stronger loyalty for the restaurant I participated in and looking to sample other participating restaurants.  All of the participants can stand to do more work to spread the word about their involvement.  If only on their site, Facebook page and/or blog, it might not be enough as those visitors are already fans of the establishment.  There are numerous opportunities to reach people who are looking to engage businesses who support their own community. And if you ask most people, the only thing holding them back from donating to organizations is the simple secure opportunity to do so.

In a bit of a different twist where paying it forward becomes a human by-product rather than the actual plan, Jonathan Stark’s Starbucks card made the rounds in August of 2011 before being closed due, in part, to its own success.  What supposedly started as an experiment became an opportunity for people to pay it forward in a completely virtual way.  Stark first published the image of his Starbuck’s card app with a $30 balance and the request for people to use it as they wish.

Instead of being quickly depleted, it lasted for weeks with people adding value to the card.  It became a version of leave a penny, take a penny.  Ultimately, it generated enough buzz that there was coverage and that was when things started to go awry.  You can find more information about what happened, but in a nutshell, someone wrote a program that enabled them to transfer the card’s value to their own card – effectively stealing from the general coffers.  Upon discovering this breach, Starbucks closed the account.

What was interesting about this “experiment” is that people took advantage of the free component, but also felt inclined to give more than they received.  The communal fortune and sense of belonging was stronger than the initial joy of receiving something for free.  Again, it was the opportunity to give that made the difference.  It was the equivalent of yelling “Drinks are on me!” in a loaded bar, but in a much more palatable scale.  Though Starbucks was not the sponsor of this event, they truly benefitted from the buzz and its subsequent sampling of both the coffee and the benefits of their app without spending a cent.

If only a company were able to tap into these communal benefit mechanics or something similar and actually leverage them effectively, who knows what kind of growth there can be in loyalty and bottom line.  The major challenge is in pulling it off without seeming to be manipulative or dis-ingenuine.  Customers will sense it instantly. There are many companies that donate money or time to organizations.  There are many that specify that a percentage of a purchase will go to charity, but not many put it in the hands of the customer like the two executions above show.  I imagine that corporate sponsorship of a program like this has been done before, but these just exemplify how they can be done on a simple small scale. If promotions is done properly by the right brands/companies/retailers/restaurants there could be huge upside while also making a considerable difference in the world – or at least the community around us.

In the case of Stark’s Starbucks card, the site and its Twitter account live on sort of in the capacity of showing how people are paying it forward in the way his radical experiment uncovered.  Perhaps the time is right for companies to tap into that sensation and provide the opportunity for everyone to give back and pay it forward…

Starbucks CEO Crossing CRM Line?

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.