This document discusses how Starbucks uses business analytics to gain insights into customers. It explains that Starbucks analyzes customer data from loyalty cards and mobile payments to segment customers, gain market insights, and increase customer loyalty. Starbucks uses analytics to improve operations in areas like customer satisfaction, employee engagement, and store location selection. The document also describes how Starbucks' mobile app for ordering and payments has increased convenience for customers and boosted sales.
Managing uncertainty in data - Presentation at Data Science Northeast Netherl...University of Twente
Managing uncertainty in data: the key to effective management of data quality problems
Business analytics and data science are significantly impaired by a wide variety of 'data handling' issues, especially when data from different sources are combined and when unstructured data is involved. The root cause of many such problems centers around data semantics and data quality. We have developed a generic method which is based on modeling such problems as uncertainty *in* the data. A recently conceived new kind of DBMS can store, manage, and query large volumes of uncertain data: the UDBMS or "Uncertain Database". Together, they allow one to, e.g., postpone the resolution of data problems, assess what their influence is on analytical results, etc. We furthermore develop technology for data cleansing, web harvesting, and natural language processing which uses this method to deal with ambiguity of natural language and many other problems encountered when using unstructured data.
The introductory morning session will discuss big data challenges and provide an overview of the AWS Big Data Platform. We will also cover:
• How AWS customers leverage the platform to manage massive volumes of data from a variety of sources while containing costs.
• Reference architectures for popular use cases, including: connected devices (IoT), log streaming, real-time intelligence, and analytics.
• The AWS big data portfolio of services, including Amazon S3, Kinesis, DynamoDB, Elastic MapReduce (EMR) and Redshift.
• The latest relational database engine, Amazon Aurora - a MySQL-compatible, highly-available relational database engine which provides up to five times better performance than MySQL at a price one-tenth the cost of a commercial database.
• Amazon Machine Learning – the latest big data service from AWS provides visualization tools and wizards that guide you through the process of creating machine learning (ML) models without having to learn complex ML algorithms and technology.
Managing uncertainty in data - Presentation at Data Science Northeast Netherl...University of Twente
Managing uncertainty in data: the key to effective management of data quality problems
Business analytics and data science are significantly impaired by a wide variety of 'data handling' issues, especially when data from different sources are combined and when unstructured data is involved. The root cause of many such problems centers around data semantics and data quality. We have developed a generic method which is based on modeling such problems as uncertainty *in* the data. A recently conceived new kind of DBMS can store, manage, and query large volumes of uncertain data: the UDBMS or "Uncertain Database". Together, they allow one to, e.g., postpone the resolution of data problems, assess what their influence is on analytical results, etc. We furthermore develop technology for data cleansing, web harvesting, and natural language processing which uses this method to deal with ambiguity of natural language and many other problems encountered when using unstructured data.
The introductory morning session will discuss big data challenges and provide an overview of the AWS Big Data Platform. We will also cover:
• How AWS customers leverage the platform to manage massive volumes of data from a variety of sources while containing costs.
• Reference architectures for popular use cases, including: connected devices (IoT), log streaming, real-time intelligence, and analytics.
• The AWS big data portfolio of services, including Amazon S3, Kinesis, DynamoDB, Elastic MapReduce (EMR) and Redshift.
• The latest relational database engine, Amazon Aurora - a MySQL-compatible, highly-available relational database engine which provides up to five times better performance than MySQL at a price one-tenth the cost of a commercial database.
• Amazon Machine Learning – the latest big data service from AWS provides visualization tools and wizards that guide you through the process of creating machine learning (ML) models without having to learn complex ML algorithms and technology.
This paper:
- Reviews data on the changes in customer behavior that are driving the need for a holistic approach to data including mobile app event data
- Summarizes the current state of customer data management and its limitations, using a simple COLLECT|ORGANIZE|ANALYZE|ACTION model
- Using the same model, it outlines the necessary characteristics of a data management platform that can meet the needs of enterprise in this rapidly changing consumer media environment
This paper:
Reviews data on the changes in customer behavior that are driving the need for a holistic approach to data including mobile app event data
Summarizes the current state of customer data management and its limitations, using a simple COLLECT|ORGANIZE|ANALYZE|ACTION model
Using the same model, it outlines the necessary characteristics of a data management platform that can meet the needs of enterprise in this rapidly changing consumer media environment
4 Steps on How to Get Executive Support for your Advocacy ProgramDon Schindler
Online Word of Mouth Programs are one of the best ways to market your business. This presentation goes through the four steps to get your executive team to say "yes" to your employee or customer advocacy program.
Monetizing mobile applications (Presentation)Zlatko Stapic
Presented at CASE25 developer conference.
Abstract: Although the mobile applications are everywhere and even if you have a brilliant idea, the monetization of a mobile application is not an easy task. On the other side, there are examples of companies and individuals which make an enormous amount of money on their free apps. How is that possible? Well, obviously, they have chosen the successful business model/s. Thus, this paper will present trends and possible models in monetization along with the practical insights in implementation in Android and Windows Phone mobile applications. Having the broad and complete picture of different possibilities, it should be easier to define and choose an appropriate business model for any specific mobile application.
This presentation was delivered to students soon to complete undergraduate and masters degrees in technology and IT disciplines at Oxford Brookes University. The presentation highlights five "hot" areas of demand in the current IT jobs market, and offers resources and free or low cost certifications to allow candidates to "upskill".
Forrester's Tina Moffett explorers the adoption of advanced analytics, measurement and attribution across marketing channels. She will share current practices and trends to better understanding how brands can use and apply measurement and analytics in their organization to optimize both cross-channel marketing campaigns and customer programs.
Bye Bye IT, we'll miss you!
Savvy business is making IT unnecessary. IT is making itself irrelevant. Breaking down 5 trends over the past 3 years I will show why IT as we've known it will no longer exist, and I will share my thoughts on the 4 paths of IT professionals by examining the service supply chain. The 5 trends will be: 1) Cloud Computing 2) BYOD 3) Outsourcing 4) App Stores 5) Software Mergers and Acquisitions
See Matthew's TFT speaker Pinterest board: http://pinterest.com/servicedesk/matthew-hooper/
Activating 1 to-1 Customer Service Relationships with MobileWaterfall Mobile
Organizations like the National Dating Abuse Helpline (NDAH) and DoSomething.org have found overwhelming success using mobile to connect with their constituents. This success stems from the fact that mobile establishes a direct, 1-to-1 connection with the end user, as opposed to a more impersonal, 1-to-many interaction.
Brands and agencies should take note, as this same line of thinking applies to consumer-focused, customer service communication. Drawing on best practices from organizations like NDAH and DoSomething.org, for-profit corporations can learn to modernize customer service communication and retain lasting customer satisfaction.
Viewers will walk away understanding what type of mobile communication produces 1-to-1 customer relationships, as well as the process for monetizing these best practices.
Tracxn Startup Research: Data as a Service Landscape, August 2016Tracxn
The top three funded sub-sectors till date are market intelligence (149 investments, $1.3B), financial data providers (158 investments, $1.2B), and geospatial data providers.
Efma distribution summit 2015 - banking on wearables how does it differ compa...YVON MOYSAN
Internet of Things: international Banking and Insurance wearable apps
Glasses, watches, wristbands, virtual reality headset, iBeacon or even wearable suits… Which bank or insurer have already launched a wearable app and why? What are the features of these apps dedicated to customers or employees? What are customers’ needs and expectations? What are customers’ fears? What are primary customers’ uses ? What are the app features that banks and insurers have already abandoned? What are the future app features or devices that banks and insurers expect to focus on? What are the Internet of Things key figures and projected trends?
This study includes more than 150 slides and covers the major wearables app that banks and insurers have developed so far. More than 70 of them are indeed analyzed. The objectives of the bank or the insurer are presented and illustrated by CEO or Digital Marketing Director verbatim, the main current and future features of the app and first customers’ feedbacks are detailed. In addition, the study includes several relevant links to press articles and videos illustrating the bank or insurer wearable app.
Efma distribution summit 2015: digital banking conference - banking on wearab...Saint Germain Consulting
- Wearables: key metrics
- Wearables in the banking industry: customers fears and expectations
- Banco Sabadell, Bank Leumi, Caixa Bank, Credit Mutuel Arkea develop Google glass and smartwatch app to manage personal finances
- Moven and Alfa Bank introduce gamification through wearables to allow customers to save money
This paper:
- Reviews data on the changes in customer behavior that are driving the need for a holistic approach to data including mobile app event data
- Summarizes the current state of customer data management and its limitations, using a simple COLLECT|ORGANIZE|ANALYZE|ACTION model
- Using the same model, it outlines the necessary characteristics of a data management platform that can meet the needs of enterprise in this rapidly changing consumer media environment
This paper:
Reviews data on the changes in customer behavior that are driving the need for a holistic approach to data including mobile app event data
Summarizes the current state of customer data management and its limitations, using a simple COLLECT|ORGANIZE|ANALYZE|ACTION model
Using the same model, it outlines the necessary characteristics of a data management platform that can meet the needs of enterprise in this rapidly changing consumer media environment
4 Steps on How to Get Executive Support for your Advocacy ProgramDon Schindler
Online Word of Mouth Programs are one of the best ways to market your business. This presentation goes through the four steps to get your executive team to say "yes" to your employee or customer advocacy program.
Monetizing mobile applications (Presentation)Zlatko Stapic
Presented at CASE25 developer conference.
Abstract: Although the mobile applications are everywhere and even if you have a brilliant idea, the monetization of a mobile application is not an easy task. On the other side, there are examples of companies and individuals which make an enormous amount of money on their free apps. How is that possible? Well, obviously, they have chosen the successful business model/s. Thus, this paper will present trends and possible models in monetization along with the practical insights in implementation in Android and Windows Phone mobile applications. Having the broad and complete picture of different possibilities, it should be easier to define and choose an appropriate business model for any specific mobile application.
This presentation was delivered to students soon to complete undergraduate and masters degrees in technology and IT disciplines at Oxford Brookes University. The presentation highlights five "hot" areas of demand in the current IT jobs market, and offers resources and free or low cost certifications to allow candidates to "upskill".
Forrester's Tina Moffett explorers the adoption of advanced analytics, measurement and attribution across marketing channels. She will share current practices and trends to better understanding how brands can use and apply measurement and analytics in their organization to optimize both cross-channel marketing campaigns and customer programs.
Bye Bye IT, we'll miss you!
Savvy business is making IT unnecessary. IT is making itself irrelevant. Breaking down 5 trends over the past 3 years I will show why IT as we've known it will no longer exist, and I will share my thoughts on the 4 paths of IT professionals by examining the service supply chain. The 5 trends will be: 1) Cloud Computing 2) BYOD 3) Outsourcing 4) App Stores 5) Software Mergers and Acquisitions
See Matthew's TFT speaker Pinterest board: http://pinterest.com/servicedesk/matthew-hooper/
Activating 1 to-1 Customer Service Relationships with MobileWaterfall Mobile
Organizations like the National Dating Abuse Helpline (NDAH) and DoSomething.org have found overwhelming success using mobile to connect with their constituents. This success stems from the fact that mobile establishes a direct, 1-to-1 connection with the end user, as opposed to a more impersonal, 1-to-many interaction.
Brands and agencies should take note, as this same line of thinking applies to consumer-focused, customer service communication. Drawing on best practices from organizations like NDAH and DoSomething.org, for-profit corporations can learn to modernize customer service communication and retain lasting customer satisfaction.
Viewers will walk away understanding what type of mobile communication produces 1-to-1 customer relationships, as well as the process for monetizing these best practices.
Tracxn Startup Research: Data as a Service Landscape, August 2016Tracxn
The top three funded sub-sectors till date are market intelligence (149 investments, $1.3B), financial data providers (158 investments, $1.2B), and geospatial data providers.
Efma distribution summit 2015 - banking on wearables how does it differ compa...YVON MOYSAN
Internet of Things: international Banking and Insurance wearable apps
Glasses, watches, wristbands, virtual reality headset, iBeacon or even wearable suits… Which bank or insurer have already launched a wearable app and why? What are the features of these apps dedicated to customers or employees? What are customers’ needs and expectations? What are customers’ fears? What are primary customers’ uses ? What are the app features that banks and insurers have already abandoned? What are the future app features or devices that banks and insurers expect to focus on? What are the Internet of Things key figures and projected trends?
This study includes more than 150 slides and covers the major wearables app that banks and insurers have developed so far. More than 70 of them are indeed analyzed. The objectives of the bank or the insurer are presented and illustrated by CEO or Digital Marketing Director verbatim, the main current and future features of the app and first customers’ feedbacks are detailed. In addition, the study includes several relevant links to press articles and videos illustrating the bank or insurer wearable app.
Efma distribution summit 2015: digital banking conference - banking on wearab...Saint Germain Consulting
- Wearables: key metrics
- Wearables in the banking industry: customers fears and expectations
- Banco Sabadell, Bank Leumi, Caixa Bank, Credit Mutuel Arkea develop Google glass and smartwatch app to manage personal finances
- Moven and Alfa Bank introduce gamification through wearables to allow customers to save money
9. IMPROVING OPERATIONS WITH BUSINESS
ANALYTICS
Business Analytics Contribute to
Operational Excellence
Customer
Satisfaction
Employee
Engagement
Store Location
Selection
21. References
• All Images used in this presentation, unless otherwise specified, are Copyright Free and Fully Licensed from Adobe
Stock Images
• Bakker, E. (2015, June 21). Here's what happened in payments this week. Retrieved September 24, 2015, from
Business Insider: http://www.businessinsider.com/heres-what-happened-in-payments-this-week1-2015-6
• Barris, M. (2014, December 8). Starbucks brews iBeacon strategy to support premium coffee play. Retrieved
September 17, 2015, from Mobile Commerce Daily: http://www.mobilecommercedaily.com/starbucks-cooks-up-
ibeacon-strategy-to-support-premium-coffee-emphasis
• Bhasin, K. (2013, March 25). Starbucks Exec: "We Know Who You Are, We Know How You're Different From Others".
Retrieved September 17, 2015, from Business Insider: http://www.businessinsider.com/starbucks-exec-on-loyalty-
card-data-tracking-2013-3
• Boardroom Insiders. (2014, December 29). Curt Garner, Executive Profile. Retrieved September 24, 2015, from
Boardroom Insiders: http://www.boardroominsdiders.com
• Dormehl, L. (2015, January 23). Starbucks's Mobile App Payments Now Represent 16% Of All Starbucks
Transactions. Retrieved September 24, 2015, from Fast Company: http://www.fastcompany.com/3041353/fast-
feed/starbucks-mobile-app-payments-now-represent-16-of-all-starbucks-transactions
• Elgan, M. (2014, June 14). Forget coffee, Starbucks is a tech company. Retrieved September 24, 2015, from
Computerworld: http://www.computerworld.com/article/2490746/retail-it/forget-coffee--starbucks-is-a-tech-
company.html
• Furnas, A. (2012, April 3). Everything you wanted to know about data mining but were afraid to ask. Retrieved
September 24, 2015, from The Atlantic: http://www.theatlantic.com/technology/archive/2012/04/everything-you-
wanted-to-know-about-data-mining-but-were-afraid-to-ask/255388/
22. References
• Geisel Software. (2014). Starbucks Mobile Card Payment System: The New 'Hot' Thing in Town. Retrieved
September 24, 2015, from Geisel Software: http://monitor-360.com/ideas/making-sure-the-cup-stays-full-
at-starbucks
• Industry Perspective and G2. (2014, May 14). Apple iBeacon payment experience. Retrieved September 24,
2015, from Industry Perspective and G2: http://blog.starpointllp.com/blog/?p=3776
• Murphy, C. (2011, December 8). How Starbucks Taps 7 Tech Trends. Retrieved September 17, 2015, from
Information Week: http://www.informationweek.com/it-leadership/how-starbucks-taps-7-tech-trends/d/d-
id/1101730?
• Patel, T., & Thompson, W. (2013). Data Mining from A to Z: Better Insights, New Opportunities. SAS Institute.
Cary, NC: SAS Institute. Retrieved September 24, 2015, from http://www.sas.com/en_ie/whitepapers/data-
mining-from-a-z-104937.html
• Perez, S. (2015, September 22). Starbucks Mobile Order and Pay Now Live Nationwide, delivery service in
testing by year-end. Retrieved September 24, 2015, from TechCrunch:
http://techcrunch.com/2015/09/22/starbucks-mobile-order-pay-now-live-nationwide-delivery-service-in-
testing-by-year-end/
• Roemmele, B. (2014, June 13). Forbes. Retrieved September 17, 2015, from Why Is The Starbucks Mobile
Payments App So Successful?: http://www.forbes.com/sites/quora/2014/06/13/why-is-the-starbucks-
mobile-payments-app-so-successful/
• Rose, S. (2013, May 1). What insurers can learn from Starbucks. Retrieved September 17, 2015, from SAS:
http://blogs.sas.com/content/insurance/2013/05/01/what-insurers-can-learn-from-starbucks/
23. References
• Rouse, M. (2010). What is business analytics (BA)? Retrieved September 24, 2015, from TechTarget:
http://searchbusinessanalytics.techtarget.com/definition/business-analytics-BA
• Stein, J. (2011, March 10). Data mining: How companies now know everything about you. Retrieved
September 24, 2015, from Time: http://content.time.com/time/magazine/article/0,9171,2058205,00.html
• Stein, J., Sakellariadis, S., & Cole, A. (2014). Making sure the cup stays full at Starbucks. Retrieved September
24, 2015, from Monitor 360: http://monitor-360.com/ideas/making-sure-the-cup-stays-full-at-starbucks
• Thau, B. (2014, April 24). How big data helps chains like Starbucks pick store locations--an (unsung) key to
retail success. Retrieved September 24, 2015, from Forbes:
http://www.forbes.com/sites/barbarathau/2014/04/24/how-big-data-helps-retailers-like-starbucks-pick-
store-locations-an-unsung-key-to-retail-success/
• The S Curve. (2015, Junw 25). Corn Chowder mixed with Conversion Funnel Analysis!-Target your Customer
Segment. Retrieved September 24, 2015, from The S. Curve: http://www.thescurve.com/blog/corn-chowder-
mixed-with-conversion-funnel-analysis-target-your-customer-segment/
• TruLens. (2013, August 5). What Dunkin' Donuts Drinkers Talk About. Retrieved September 24, 2015, from
TruLens: http://truelens-blog.growepic.com/socialgraphic-comparison-dunkin-donuts-vs-starbucks/
• TruLens. (2013, August 5). What Starbucks Drinkers Talk About. Retrieved September 24, 2015, from TruLens:
http://truelens-blog.growepic.com/socialgraphic-comparison-dunkin-donuts-vs-starbucks/
• Venkatraman, A. (2014, October 10). Starbucks uses cloud to manage innovation and disruptive technologies.
Retrieved September 24, 2015, from Computer Weekly:
http://www.computerweekly.com/news/2240232395/Starbucks-uses-cloud-to-manage-innovation-and-
disruptive-technologies
Editor's Notes
Since the return of Howard Schultz as CEO of Starbucks in 2008, the company has been laser-locked on business analytics; which has fueled exceptional growth and profitability. Patel and Thompson of the SAS Institute know that “Success is based on your ability to discover more meaningful and predictive insights from all the data you capture” (Patel and Thompson, 2014, p. 1). This presentation will examine how Starbucks has leveraged technology and business analytics to successfully make use of its data.
In today’s data rich business environments there is certainly no shortage of quality data that organizations can use. What sets some companies apart is how they can process, analyze, and use the knowledge gained to make more effective business decisions on a shorter timeline. One example of an organization on the cutting edge of using data mining to inform their business analytics process resulting in superior business intelligence and sales growth is Starbucks.
Business Analytics (BA) is defined as the practice of iterative, methodical exploration of an organization’s data with emphasis on statistical analysis. Business analytics is used by companies committed to data-driven decision making (Rouse, 2010). Starbucks is one of the largest innovators in regard to applying business analytics in order to benefit the company.
Starbucks is competing in a heavily commoditized product category, and seeks an ultra premium price point for its product (Rose, 2013). In order to successfully execute this strategy, Starbucks needs to create points of differentiation between its brand and those of its competitors. Through its use of data mining and analytics Starbucks develops a coherent and comprehensive view of its most loyal customers, down through those who interact with the brand on a much less frequent basis (Bhasin, 2013). But what does that allow Starbucks to do?
In general, organizations that effectively process and mine their data gain 3 key benefits: Effective Customer Segmentation, Market Insights, and Customer Loyalty.
Customer segmentation gives Starbucks the ability to anticipate customer behaviors and needs by segment so they can more effectively market each segment with relevant products and services.
Market Insights from Business Analytics helps Starbucks gain insight into which products a customer is likely to buy allowing them to hone their messaging to high probability up-sell and cross-sell opportunities.
In terms of customer loyalty, data analysis allows Starbucks to develop and execute effective customer acquisition and retention strategies based on purchase patterns. All this has translated into increased sales, customer and employee loyalty and growth.
Starbucks has used business analytics to improve business operations in terms of customer satisfaction, employee satisfaction, and new store location selection.
Starbucks is able to collect large amounts of data from its consumers just from the loyalty program. Starbucks uses SQL Cloud Services and “Oracle Siebel customer relationship management service as its loyalty system, which is tied to the Oracle ERP platform. Siebel…delivers a combination of transactional, analytical and engagement features to manage all customer-facing operations” (Venkatraman, 2014, paras 2-3). A quarter of all company transactions made in 2013 were with Starbucks cards and the mobile app (Kaye, 2013). In January of 2015, it was noted that 16% of all Starbucks transactions were made on the mobile app (Dormehl, 2015). Utilizing loyalty cards and the mobile app, customers provide massive amounts of data for Starbucks to mine. Starbucks uses “card information to segment consumers and set up business rules based on purchase behavior, then pumps out offers immediately to them” (Kaye, 2013). Starbucks transformed their loyalty card program from an annoying business ploy to a convenient, consumer friendly tool on their smart phones that people actually want to use.
Starbucks hired Monitor 360 to analyze employee narratives on glassdoor.com to improve employee engagement and its employment brand to reduce turnover and enhance recruitment (Stein, Sakellariardis, & Cole, 2014). It costs $3000 to replace just one barista (Stein, Sakellariardis, & Cole, 2014), so reducing turnover has a major impact on company profitability, especially in a company that employees 190,000 people. The narrative analytics analysis yielded three major “takeaways” to improve employee engagement in its stores: 1) amplify the positive, 2) address middle management disconnects, and 3) identify triggers of new threats to the company’s specialty brand (Stein, Sakellariardis, & Cole, 2014). Utilizing this information, Starbucks is able to create an exceptional work environment for its employees.
With the help of the location analytics company Esri, Starbucks used mapping software and location analytics to optimize new store development opportunities—choosing new store locations without cannibalizing sales at existing locations in the vicinity (Thau, 2014).
Starbucks has been able to supply customers with exceptional service by gathering a great deal of customer information. Many companies use some form of Customer Relationship Management (CRM) software to keep track of customer information. Starbucks tracks customer information through their mobile app and loyalty cards. Starbucks continually tracks customer buying habits. Based upon buying habits Starbucks sends personally tailored offers to Rewards Member’s smartphones. On an iphone, these offers show up on the notification screen and in the Starbucks app. For regular Starbucks customers, these deals result in bonus stars. Stars are earned after each purchase. Twelve stars earn a customer a free beverage or food item of their choice. For infrequent customers, different incentives and deals are used like Buy One Get One free offers or other discounts. “These deals are targeted at customers whose purchasing habits show that they may not be coming back soon. Loyalists who constantly go to Starbucks don't get the deals, since the coffee-seller isn't worried about losing them” (Bhasin, 2013, para 6).
Further, the use of and increasing prevalence of the mobile app drives increasing loyalty and increasing sales—often by just informing rewards members of new or seasonal products, but also by speeding the payment process. “Through the scan-and-go mobile pay system, customers are able to pay for purchases the fast and easy way without the hassle. Since everything is electronic, it reduces the use of plastic gift cards, promote a more efficient ordering process whilst providing more advantages to customers” (Geisel, 2014, para 5).
The mobile app now allows for orders to be placed before a customer even reaches the store and eliminates waiting. “The idea with Mobile Order & Pay is to offer customers a faster alternative to waiting in line. Using a simple, touch-based interface, you can select food and beverage items from the in-app menu, choose which store you want to pick up from by referencing an included store list and map, then pay using your Starbucks card to complete the transaction” (Perez, 2015, para 3) before even arriving at the store.
Mobile Order & Pay provides Starbucks an enormous amount of data to increase efficiencies and store offerings in addition to eliminating wait times. Knowing what is purchased at each store will help fine-tune inventories and prevent over or understocking. Knowing what each customer orders down to the number of pumps in a chai latte improves product development and special offer targeting. It also allows store managers and employees to better understand the needs of their local clientele, which can result in specific training strategies to improve customer service in each market. Mobile app ordering enhances the company’s ability to compile customer data to provide patrons with exactly what they need—which will soon include delivery to homes and offices. In short, the Mobile app has been key to creating and improving Starbucks’ reputation as an unparalleled leader in customer service.
The mobile app has driven sales increases every year since it was introduced in 2009, and it continues to contribute huge profits for Starbucks. “The company mobile transactions exceeded $1 billion in 2013, according to one estimate. The company has revealed that its mobile payment and loyalty app is used by 10 million people and generates an average of 5 million weekly transactions” (Elgan, 2014, para 17).
In addition to its mobile app payment, rewards and ordering system, instore technology is also driving customer loyalty. Starbucks offers high speed Wi-Fi and wireless charging which entices customer to want to linger and spend time inside their stores, possibly resulting in additional purchases. Along with Wi-Fi and wireless charging, Starbucks is also embracing the internet of things. “Many Starbucks stores have super high-tech Clover coffee machines, which connect to the cloud to communicate their performance and track customer preferences” (Elgan, 2014, para 15).
Starbucks is also testing the use of Apple’s iBeacon Technology. This will further help Starbucks mobile app strategy. With iBeacon technology users who are close to a store will be sent messages and possibly promotions on their smartphones. Starbucks’ servers will be able to tell when customers are close to stores. Proximity will trigger the messages. With iBeacon location information, Starbucks will be able to analyze how much time customers spend in close proximity to a Starbucks location and determine if an association between purchase activity and proximity exists. Or, if customers are nearby but not entering the store, iBeacon messages can entice them to do so when without an enticement they otherwise might not visit a Starbucks on that day (Barris, 2014, Boardroom Insiders, 2014 and Elgan, 2014).
All of this technology, data and commitment to engagement for both Starbucks’ customers and its employees synergistically provides Starbucks customers with an outstanding experience that keeps them coming back, and helps Starbucks stay ahead of its competitors. From constantly gathering information and customer preferences through data mining and analysis Starbucks is able to find new patterns and relationships to inform its product offerings and fine-tune its service delivery. Starbucks uses business analytics to continually optimize their business processes and enjoy blue ocean strategic success.