Meeting the consumer half-way: Starbucks goes digital

Posted Jul 26, 2017 by Tim Sandle
Starbucks has undertaken a host of digital innovations, from reward schemes to online pay and collect ordering. The coffee chain has undertaken valuable innovations, helping it compete in the retail sector.
Starbucks says it is closing its US stores May 29  2018 to conduct "racial-bias education"...
Starbucks says it is closing its US stores May 29, 2018 to conduct "racial-bias education" after an incident in a Philadelphia shop
The retail market has always been a movable feast but this has intensified through digital trends and culture. Many organizations have a stark choice when facing these changing market conditions: adapt or to be left behind, stuck with legacy software and outdated business strategies.
A picture of baristas at work in the first Starbucks coffee shop  Seattle  WA.
A picture of baristas at work in the first Starbucks coffee shop, Seattle, WA.
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Retail of the 21st century
According to retail analyst website AlexSoft, retailers should be embarking on the following strategies:
Omnichannel shopping experiences: This involves seamlessly integrating all shopping channels, across mobile networks can open up new channels of potential business.
Optimized user journeys: Retailers can use data analytics to gain insights about their customers’ behavior and preferences and action these. Offerings can be tailored to customers to offer them personalized experiences.
In-store digitization: This includes technologies like indoor navigation, contextual promotions distribution and customer self-service.
Advanced payments options: Retail brands can embrace the digital future by allowing consumers to use payment technology like Apple Pay and Amazon Go. The general trend in retail sees consumers switching from cashless to cardless.
Digitized customer service: With customers how telephone or post inquiries, retailers can become more efficient if they use a smart bot to handle things like answering standard questions or handling returns.
Warehouse operations: Digital solutions can help manage inventory and the supply chain.
Transforming the mermaid
Starbucks is leading the way in many of the above categories. The company has launched an “internal venture capital-style incubator for digital technology”. This includes a successful mobile application, designed to attract more customers, build brand loyalty, and increase revenue. The app includes a digital loyalty system, enabling customers to earn and redeem points (called “Stars”). This moves beyond ‘loyalty cards; offered by other retailers. ‘My Starbucks Rewards’ has more than 20 million members around the world.
Photo of starbucks drink next to a netbook with a little girl s legs in the background
Photo of starbucks drink next to a netbook with a little girl's legs in the background
Starbucks has also introduced a Mobile Order & Pay (MOP) feature. This allows customers to order their drinks in advance and pay within the app. This reduces waiting times and allows for labor savings. On introduction, comparable stores were up seven percent due to a three percent increase in traffic, according to ZdNet.
The company is also introducing the Starbucks Rewards Prepaid Card via Chase Bank. Discussing these innovations, CEO Howard Schultz said recently: “By anticipating and beginning to invest many years ahead of the mobile technology curve, Starbucks today is defining customer-facing and apartment-facing mobile and retail experiences of the future…Starbucks occupies a front-row seat at the intersection of the physical and digital worlds.”