Starbucks is a brand that has taken over the world and changed the way millions of people buy and consume coffee. With over 24,000 stores across the globe, the brand has been on top since its global expansion began 20 years ago. Much of its success has come through innovation, and its ability to stay relevant in the future will be down to how it can keep up with trends and technology to keep its customers satisfied. Read on to find out why this month we’re placing our spotlight on Starbucks.
How Starbucks Got Started
The first Starbucks opened in March 1971 in Seattle, named after a character from Moby-Dick and sold coffee beans rather than brewed coffee. The original owners sold the chain in 1987 (which was up to six stores in the city) to Howard Schultz, who had worked for Starbucks but had left after his recommendation to start selling brewed coffee in store was rejected. He had set up another chain called Il Giornale and when he bought Starbucks, he rebranded that chain and started expanding across America.
The company went public in 1992 and moved overseas four years later with a coffee shop opening in Tokyo. In 1998, Starbucks bought out the Seattle Coffee Company to move into the UK market, while the rapid expansion of the brand in shopping malls across the world was even parodied in The Simpsons. It continues to grow and open new stores around the world, with Italy a new market set to be taken on next year.
How Has Starbucks Used Digital Innovation?
Starbucks has tried various digital ideas out to keep customers loyal and feeling valued, and to keep itself always ahead of the curve. It used Salesforce to set up a community website in 2008 called My Starbucks Idea, offering customers the chance to send in feedback and suggestions, while the same year saw it trialling a free wifi reward for those with Starbucks cards. My Starbucks Rewards was introduced in 2009 and a mobile app was added in 2011 as an alternative to the physical card.
We’ve written in the past about the challenges facing companies who want to move their physical rewards customers over to digital and the rewards for those who achieve it. Starbucks has proven that it can be done and by 2014 was getting over 6 million transactions over mobile in the US.That was 15% of all transactions and by the final quarter of 2015 that was up to 21%, with over 20 million members of My Starbucks Rewards around the world.
Schultz has spoken about how important digital has been for Starbucks and how it has benefitted by acting quickly and decisively: “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. And the technology innovations we are introducing are further strengthening our brand, improving our efficiency and in-store execution, increasing our profitability, enabling us to further extend our lead over competitors, and, most importantly, enabling us to deliver an elevated Starbucks experience to our customers.”
More recent digital developments have included Mobile Order & Pay, allowing customers to pre-order their drinks via their phones and then simply pick them up, which started in the US and has been rolled-out elsewhere. Staying ahead of the curve when it comes to digital is one of the main reasons Starbucks has been able to remain at the top of its game, and it will be aiming to keep innovating so that stays the case.