Starbucks is to be re-invented - and technology is the platform on which this transformation will take place, according to the firm’s Chief Technology Officer
As per the official announcement of the new strategy this week, the ‘new’ Starbucks will feature:
Effortless digital convenience - Today’s customers are increasingly prioritizing the effortless, experiential convenience and personalization enabled by Starbucks Rewards, Mobile Order & Pay, and Starbucks Delivers. To make it even easier for customers to get Starbucks when and where they want, Starbucks is growing its Starbucks Delivers program in the US with a new partnership with DoorDash, which will expand to a national scale alongside UberEats in fiscal 2023.
Starbucks is evolving its Starbucks Rewards program with Starbucks Odyssey, a Web3-enabled experience that will bridge the physical and digital customer experience - Through Starbucks Odyssey, customers will unlock a new generation of experiential benefits – both digitally and in-person – and become a part of a digital community built on human connection.
Acceleration of the digital Starbucks Experience - While International is still in the early stages of digital expansion, Starbucks has the foundation in place to significantly accelerate growth with 28 million active Starbucks Rewards members internationally. Today, just over 10% of transactions in international licensed stores originate digitally. To accelerate the rollout of the digital Starbucks Experience around the world, Starbucks is unveiling Starbucks Digital Solutions, a platform created exclusively for our International markets to deliver a consistent digital experience for partners and customers in every location.
Expanding on theses high level ideas, Deb Hall Lefevre, who’s been CTO for four months now, reckons there’s a lot of good stuff to build on and lot more that hasn’t been done yet that will take the firm into its next era. Lefevre, whose previous roles have included exec positions at Motorola and McDonald’s, says:
In just a few months, I have been listening and learning and already I've been inspired by the singular mission that everyone around here shares, and that is delivering kindness and connection one cup at a time. I'm also impressed by the incredible technology and the incredible technology team that's already here. But I'm also already seeing opportunities to unlock greater speed and scale. The insights are driven first and foremost by the time I've been spending in stores, working shoulder-to-shoulder with the people who actually use our technology, our partners and our customers.
Starbucks spent much of the past year reflecting on where we are and where we need to go. It resulted in a clear articulation of what re-invention needs to look like. Technology is fundamental to our plans. The technology foundation that we have today, it is absolutely strong, but what we have today has not been built for our vision of the future.
To back up her argument, Lefevre cites a comparison with the US education system:
In the last 150 years, our approach to teaching has continuously evolved. We used to give teachers chalk and a board and off they went. As technology evolved, so did education delivery. We began to publish textbooks, design learning tools, incorporate computers, the internet. All along the way we've been elevating the teaching profession. But all of those technology advances never took the teacher out of the classroom. Instead, they sought to empower teachers to do their work and their highest caliber.
It’s all about connection, she argues:
It's the connection between the student and the teacher that makes all the difference. In technology at Starbucks, we aspire to the same goals. We will never replace our baristas. They are the core of who we are, and they deliver that connection to our customers every day. We are instead laser-focused on how we enable our partners to bring humanity, kindness and coffee to every one of those 14 million, one-on-one connections that they make every single day. Simply put, our job is to automate the work and simplify it, so their job is easier and more joyful.
The existing Starbucks tech stack is already impressive, she said:
Our app is the envy of every retailer. We scaled our e-commerce and rewards programs to support Starbucks aggressive digital growth. And with 24.7 million active reward members driving over half of our US company-operated sales, I think we've done pretty darn well. We're also data-driven. Our millions of daily customer interactions give us the ability to use our data and our incredible data expertise to guide our business. We integrate data and insights into every part of our business.
There are three pillars of the tech strategy moving forward - stabilize, modernize, optimize. The first of those brings us back to the much-vaunted mobile app as Lefevre admits:
Our mobile app has had a few brief outages over the past few months. With a quarter of our US sales coming through our digital channels, it's just imperative that the tech works. We know that even a few minutes of downtime can mean lost moments of connection between our partners and our customers, confusion in our stores and, of course, lost business opportunities. That's why our top priority is to have resilience in our digital channels.
That achieved, it’s time for everything to get a makeover, she said:
For over 50 years Starbucks has pioneered increasingly modernised customer experiences and as we've been lining them up, we've created a bit of complexity. We've absolutely been making the right decisions for our customers, but that complexity has built up a little bit in our tech ecosystem, and it sometimes slows us down. We will modernize and simplify our architecture to be able to scale new ideas and innovation faster and we will unlock ourselves from the shackles of multiple monolithic systems, become more agile.
As for the final step of optimizing, she declares one area for focus is rationalizing the hardware used in stores:
We're seeking to find ways to extend our digital assets, the ones we already have to do more for our business. We have an opportunity to transform the partner experience if we take our customer-facing digital assets and make them barista-facing as well.
Across the board
In all of this, the important point is that tech is the horizontal platform across the entire company, she argues:
Our technology cannot be designed for a single stakeholder; it must be built to support the holistic Starbucks experience...Technology does not support those moves discretely. It spans all of the re-invention plan, lighting up different aspects of it.
Greater customer personalization capabilities will be a priority, she adds:
We're focusing on personalizing journeys to drive the next best action in our Starbucks reward lifecycle and in our app, providing relevant, event-based offers and content, simplifying and taking friction out of the sign-up process. In addition, we're developing a frictionless payment program that will automatically recognize and authenticate our customers as they pass the drive through, helping unlock a more personalized effortless experience for them and for our partners.
The education sector analogy is an interesting one. Lefevre says:
The history of education technology is one of continuously giving teachers more and better tools to deliver instruction. And it's been supporting our education professionals to build the trust-based relationships that they need to inspire and nurture their students minds.
As a company, we have spent 50 years inspiring and nurturing the human spirit. Partners do that every day. They're the ones who have built that trust with our customers and we are relying on our partners to continue to foster those moments of connection. So much like education technology, Starbucks technology does not seek to replace our partners, but instead seeks to elevate and empower them to deliver another century’s worth of connections.
That’s the plan.
Now put it into action.