Starbucks Case Study (... X Starbucks Case Study.pdf (SEC... + Create All tools Edit Convert Sign Edit MODIFY PAGE C G D C Organize pages ADD CONTENT T+ Text Image Header and footer Watermark > Link More OTHER OPTIONS Redact a PDF Prepare a form Edit text, images, pages, and more. Free 7-day trial Find text or tools Q | + e. ΑΙ 922-0003-1 sensors. Every shot of espresso was logged in by the IoT technology and analyzed for tuning and maintenance. The IoT when combined with Deep Brew then predicted which machines would need maintenance in future. The IoT-enabled coffee machines collected data such as water quality, the type of beans used, and the coffee's temperature. Using the IoT, Starbucks could also send new coffee recipes to the Azure Sphere-enabled espresso machines from the cloud at the click of a button. According to Jeff Wile, senior vice president of retail and core technology services for Starbucks Technology, “Think about the complexity - we have to get to 30,000 stores in nearly 80 markets to update those recipes. That recipe push is a huge part of the cost savings and the justification for doing this. ,,38 In 2019, Starbucks deployed 1,900 units of Mastrena II espresso machines enabled by AI to understand the preferences of consumers better.39 Other Initiatives In 2019, Starbucks opened its first pick-up only store in the US. These locations were started to cater to 'grab and go' customers who were ordering through the Starbucks app. In 2019, Starbucks with the help of Microsoft launched the Starbucks Production Controller - a cloud-based platform which helped the coffee giant with order sequencing, labeling, product build times, and routing. In 2019, Starbucks launched 'Teamworks' - a scheduling app wherein the baristas at Starbucks could access their work schedules by downloading the app on their personal device. According to Starbucks COO Rosalind Gates Brewer, "I'll also mention too that we implemented Teamworks this quarter and Teamworks is our labor scheduling initiative and it allows our schedule accuracy to improve. And our partners really respond to that because they know their hours. And I actually it makes the planning process much easier for the store manager and reduces the amount of work. So, we've got great engagement right now, a we're not seeing a shift in our attrition right now. >>40 In August 2020, Microsoft launched a blockchain" tool for Starbucks that let customers track the entire supply chain of where their coffee was coming from. Customers could scan the codes on their coffee bags bought from Starbuck stores in a bid to discover their origin. The consumers would get access to information such as the country from where the coffee was sourced, the farms, and the farmers producing the coffee. With this digital initiative, Starbucks was emphasizing its commitment toward sustainability and transparency. THE BENEFITS While the app made ordering convenient for consumers, it also served as a data mine for Starbucks to analyze the tastes and preferences of its consumers. The app also provided the company data on the popular store locations, drinks, and time of day preferred by consumers. n By leveraging on the data gathered from the Digital Flywheel, Starbucks came out with new products. For instance, the coffee giant in its analysis found that around 43% of people drinking tea did not add sugar to their tea and around 25% of the consumers did not prefer to add milk to their iced tea when they had the beverage at home. This data led to Starbucks launching unsweetened drinks, non-dairy drinks, summer special drinks, and new home consumption products. The company also launched other drinks such as iced coffee without milk and added flavors and pumpkin spice caffe latte, using insights from the consumers. 41 Blockchain is a digital ledger of transactions. It is a type of distributed ledger technology in which transactions are recorded with hash, an immutable cryptographic signature making the block chain system difficult to change or hack. 1479 APR 20 □ 6 0 C G Q Starbucks Case Study (... X Starbucks Case Study.pdf (SEC... + Create All tools Edit Convert Sign Edit + Find text or tools Q 922-0003-1 MODIFY PAGE C 0 C Organize pages ADD CONTENT T+ Text Image Header and footer Watermark > Link More OTHER OPTIONS Redact a PDF Prepare a form e. ΑΙ Digital Flywheel Program The mobile app had huge amounts of data on the tastes and preferences of consumers. Thus, to provide consumers with more personalized recommendations, Starbucks launched the Digital Flywheel program in 2017. This program was built around the 4 pillars of rewards, mobile ordering, payment, and personalization. Under the Digital Flywheel, the company implemented AI in its Starbucks Rewards program and took into consideration factors such as order history of consumers, time of day, weather, workday or weekend, to suggest food and drink suggestions to the consumers. 34 The Digital Flywheel also sent push notifications to Starbucks mobile app users to engage with them more effectively. According to Starbucks global chief strategy officer Matthew Ryan, Digital Flywheel would merge the physical touch points with the digital to "not only drive superior business results in the short term, based on rewards, ordering, and personalization, but we also make it very challenging for digital companies to outmaneuver us in the physical world."35 Within a year of the launch i.e. in 2018, the Digital Flywheel program led to a growth of 8% in spending among Starbucks rewards active members. Commenting on the results, Schultz said, "Our new one-to-one personalized marketing capability...will prove to be a retail industry game changer. Deep Brew ,,36 In 2017, Starbucks in partnership with Microsoft launched Deep Brew - an AI engine. The Deep Brew algorithms were built on Azure wherein Starbucks could deploy ML on drive-thru menu boards, enabling customers to order and pay on apps. The AI software adapted to consumers' preferences and made product recommendations for them. The data from AI was also used by Starbucks to understand the buying habits of consumers and this data was used across different channels such as supermarkets. The company could decide with which products the home drinker could be targeted and how to make changes to items on the menu to give its consumers a delightful experience. The AI engine sent customized discounts and e-mails to the consumers. The app could also track the location of the customer and provide directions to the nearest Starbucks store. Users could engage with a virtual barista on the app as well by placing an online order by clicking on the menu or by using the voice command feature on the phone. The AI helped Starbucks in calculating the inventory needs of a store and how many baristas would be needed every day. The employees thus saved time and used this time for better engaging with the consumers. 37 The Deep Brew brought in huge success for Starbucks with the customer base reaching nearly 18 million by the end of 2019, with same-store sales growth of 6% in the US." Internet of Things While the digital transformation at Starbucks was meant to 'reignite' its relationship with consumers, the coffee giant also used AI and Internet of Things (IoT) for preventive maintenance of its equipment. The stores had coffee machines, blenders, and grinders which were operational for 16 hours a day. Any glitch in the equipment would result in a stalling of the company's operations. In a bid to reduce such disruptions, Starbucks partnered with Microsoft to deploy Azure Sphere to ensure that IoT-connected devices across its stores functioned properly. Microsoft in association with Starbucks developed a device known as the Guardian Module for connecting the equipment with Azure Sphere to aggregate data and find problems with the machines. The company's Mastrena super-automatic espresso machines came equipped with Azure Sphere comprises products and services from Microsoft with built-in communication and security features for IoT devices. Edit text, images, pages, and more. Free 7-day trial 1479 APR 20
Starbucks Case Study (... X Starbucks Case Study.pdf (SEC... + Create All tools Edit Convert Sign Edit MODIFY PAGE C G D C Organize pages ADD CONTENT T+ Text Image Header and footer Watermark > Link More OTHER OPTIONS Redact a PDF Prepare a form Edit text, images, pages, and more. Free 7-day trial Find text or tools Q | + e. ΑΙ 922-0003-1 sensors. Every shot of espresso was logged in by the IoT technology and analyzed for tuning and maintenance. The IoT when combined with Deep Brew then predicted which machines would need maintenance in future. The IoT-enabled coffee machines collected data such as water quality, the type of beans used, and the coffee's temperature. Using the IoT, Starbucks could also send new coffee recipes to the Azure Sphere-enabled espresso machines from the cloud at the click of a button. According to Jeff Wile, senior vice president of retail and core technology services for Starbucks Technology, “Think about the complexity - we have to get to 30,000 stores in nearly 80 markets to update those recipes. That recipe push is a huge part of the cost savings and the justification for doing this. ,,38 In 2019, Starbucks deployed 1,900 units of Mastrena II espresso machines enabled by AI to understand the preferences of consumers better.39 Other Initiatives In 2019, Starbucks opened its first pick-up only store in the US. These locations were started to cater to 'grab and go' customers who were ordering through the Starbucks app. In 2019, Starbucks with the help of Microsoft launched the Starbucks Production Controller - a cloud-based platform which helped the coffee giant with order sequencing, labeling, product build times, and routing. In 2019, Starbucks launched 'Teamworks' - a scheduling app wherein the baristas at Starbucks could access their work schedules by downloading the app on their personal device. According to Starbucks COO Rosalind Gates Brewer, "I'll also mention too that we implemented Teamworks this quarter and Teamworks is our labor scheduling initiative and it allows our schedule accuracy to improve. And our partners really respond to that because they know their hours. And I actually it makes the planning process much easier for the store manager and reduces the amount of work. So, we've got great engagement right now, a we're not seeing a shift in our attrition right now. >>40 In August 2020, Microsoft launched a blockchain" tool for Starbucks that let customers track the entire supply chain of where their coffee was coming from. Customers could scan the codes on their coffee bags bought from Starbuck stores in a bid to discover their origin. The consumers would get access to information such as the country from where the coffee was sourced, the farms, and the farmers producing the coffee. With this digital initiative, Starbucks was emphasizing its commitment toward sustainability and transparency. THE BENEFITS While the app made ordering convenient for consumers, it also served as a data mine for Starbucks to analyze the tastes and preferences of its consumers. The app also provided the company data on the popular store locations, drinks, and time of day preferred by consumers. n By leveraging on the data gathered from the Digital Flywheel, Starbucks came out with new products. For instance, the coffee giant in its analysis found that around 43% of people drinking tea did not add sugar to their tea and around 25% of the consumers did not prefer to add milk to their iced tea when they had the beverage at home. This data led to Starbucks launching unsweetened drinks, non-dairy drinks, summer special drinks, and new home consumption products. The company also launched other drinks such as iced coffee without milk and added flavors and pumpkin spice caffe latte, using insights from the consumers. 41 Blockchain is a digital ledger of transactions. It is a type of distributed ledger technology in which transactions are recorded with hash, an immutable cryptographic signature making the block chain system difficult to change or hack. 1479 APR 20 □ 6 0 C G Q Starbucks Case Study (... X Starbucks Case Study.pdf (SEC... + Create All tools Edit Convert Sign Edit + Find text or tools Q 922-0003-1 MODIFY PAGE C 0 C Organize pages ADD CONTENT T+ Text Image Header and footer Watermark > Link More OTHER OPTIONS Redact a PDF Prepare a form e. ΑΙ Digital Flywheel Program The mobile app had huge amounts of data on the tastes and preferences of consumers. Thus, to provide consumers with more personalized recommendations, Starbucks launched the Digital Flywheel program in 2017. This program was built around the 4 pillars of rewards, mobile ordering, payment, and personalization. Under the Digital Flywheel, the company implemented AI in its Starbucks Rewards program and took into consideration factors such as order history of consumers, time of day, weather, workday or weekend, to suggest food and drink suggestions to the consumers. 34 The Digital Flywheel also sent push notifications to Starbucks mobile app users to engage with them more effectively. According to Starbucks global chief strategy officer Matthew Ryan, Digital Flywheel would merge the physical touch points with the digital to "not only drive superior business results in the short term, based on rewards, ordering, and personalization, but we also make it very challenging for digital companies to outmaneuver us in the physical world."35 Within a year of the launch i.e. in 2018, the Digital Flywheel program led to a growth of 8% in spending among Starbucks rewards active members. Commenting on the results, Schultz said, "Our new one-to-one personalized marketing capability...will prove to be a retail industry game changer. Deep Brew ,,36 In 2017, Starbucks in partnership with Microsoft launched Deep Brew - an AI engine. The Deep Brew algorithms were built on Azure wherein Starbucks could deploy ML on drive-thru menu boards, enabling customers to order and pay on apps. The AI software adapted to consumers' preferences and made product recommendations for them. The data from AI was also used by Starbucks to understand the buying habits of consumers and this data was used across different channels such as supermarkets. The company could decide with which products the home drinker could be targeted and how to make changes to items on the menu to give its consumers a delightful experience. The AI engine sent customized discounts and e-mails to the consumers. The app could also track the location of the customer and provide directions to the nearest Starbucks store. Users could engage with a virtual barista on the app as well by placing an online order by clicking on the menu or by using the voice command feature on the phone. The AI helped Starbucks in calculating the inventory needs of a store and how many baristas would be needed every day. The employees thus saved time and used this time for better engaging with the consumers. 37 The Deep Brew brought in huge success for Starbucks with the customer base reaching nearly 18 million by the end of 2019, with same-store sales growth of 6% in the US." Internet of Things While the digital transformation at Starbucks was meant to 'reignite' its relationship with consumers, the coffee giant also used AI and Internet of Things (IoT) for preventive maintenance of its equipment. The stores had coffee machines, blenders, and grinders which were operational for 16 hours a day. Any glitch in the equipment would result in a stalling of the company's operations. In a bid to reduce such disruptions, Starbucks partnered with Microsoft to deploy Azure Sphere to ensure that IoT-connected devices across its stores functioned properly. Microsoft in association with Starbucks developed a device known as the Guardian Module for connecting the equipment with Azure Sphere to aggregate data and find problems with the machines. The company's Mastrena super-automatic espresso machines came equipped with Azure Sphere comprises products and services from Microsoft with built-in communication and security features for IoT devices. Edit text, images, pages, and more. Free 7-day trial 1479 APR 20
Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
Related questions
Question
Explore how Starbucks could further improve its customer service and sales using SEO,
Transcribed Image Text:Starbucks Case Study (... X Starbucks Case Study.pdf (SEC...
+ Create
All tools Edit
Convert
Sign
Edit
MODIFY PAGE
C G D C
Organize pages
ADD CONTENT
T+ Text
Image
Header and footer
Watermark
> Link
More
OTHER OPTIONS
Redact a PDF
Prepare a form
Edit text, images, pages, and more.
Free 7-day trial
Find text or tools Q |
+
e.
ΑΙ
922-0003-1
sensors. Every shot of espresso was logged in by the IoT technology and analyzed for tuning
and maintenance. The IoT when combined with Deep Brew then predicted which machines
would need maintenance in future.
The IoT-enabled coffee machines collected data such as water quality, the type of beans used,
and the coffee's temperature. Using the IoT, Starbucks could also send new coffee recipes to
the Azure Sphere-enabled espresso machines from the cloud at the click of a button.
According to Jeff Wile, senior vice president of retail and core technology services for
Starbucks Technology, “Think about the complexity - we have to get to 30,000 stores in
nearly 80 markets to update those recipes. That recipe push is a huge part of the cost savings
and the justification for doing this.
,,38
In 2019, Starbucks deployed 1,900 units of Mastrena II espresso machines enabled by AI to
understand the preferences of consumers better.39
Other Initiatives
In 2019, Starbucks opened its first pick-up only store in the US. These locations were started to
cater to 'grab and go' customers who were ordering through the Starbucks app.
In 2019, Starbucks with the help of Microsoft launched the Starbucks Production Controller - a
cloud-based platform which helped the coffee giant with order sequencing, labeling, product build
times, and routing.
In 2019, Starbucks launched 'Teamworks' - a scheduling app wherein the baristas at
Starbucks could access their work schedules by downloading the app on their personal device.
According to Starbucks COO Rosalind Gates Brewer, "I'll also mention too that we
implemented Teamworks this quarter and Teamworks is our labor scheduling initiative and it
allows our schedule accuracy to improve. And our partners really respond to that because
they know their hours. And I actually it makes the planning process much easier for the
store manager and reduces the amount of work. So, we've got great engagement right now, a
we're not seeing a shift in our attrition right now.
>>40
In August 2020, Microsoft launched a blockchain" tool for Starbucks that let customers track the
entire supply chain of where their coffee was coming from. Customers could scan the codes on
their coffee bags bought from Starbuck stores in a bid to discover their origin. The consumers
would get access to information such as the country from where the coffee was sourced, the farms,
and the farmers producing the coffee. With this digital initiative, Starbucks was emphasizing its
commitment toward sustainability and transparency.
THE BENEFITS
While the app made ordering convenient for consumers, it also served as a data mine for Starbucks
to analyze the tastes and preferences of its consumers. The app also provided the company data on
the popular store locations, drinks, and time of day preferred by consumers.
n
By leveraging on the data gathered from the Digital Flywheel, Starbucks came out with new
products. For instance, the coffee giant in its analysis found that around 43% of people drinking
tea did not add sugar to their tea and around 25% of the consumers did not prefer to add milk to
their iced tea when they had the beverage at home. This data led to Starbucks launching
unsweetened drinks, non-dairy drinks, summer special drinks, and new home consumption
products. The company also launched other drinks such as iced coffee without milk and added
flavors and pumpkin spice caffe latte, using insights from the consumers.
41
Blockchain is a digital ledger of transactions. It is a type of distributed ledger technology in which
transactions are recorded with hash, an immutable cryptographic signature making the block chain
system difficult to change or hack.
1479
APR
20
<tv
4
A
X
W
&
11
O
Ο
Usage permitted only within these parameters. This PDF may not be reproduced, stored in a retrieval system, or uploaded to any LLM (e.g. ChatGPT).
Purchased for use on the archang from 16-Apr-2024 to 21-Apr-2024. Order ref F506515.
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Transcribed Image Text:Starbucks Case Study (... X
Starbucks Case Study.pdf (SEC...
+ Create
All tools
Edit
Convert Sign
Edit
+
Find text or tools Q
922-0003-1
MODIFY PAGE
C
0 C
Organize pages
ADD CONTENT
T+ Text
Image
Header and footer
Watermark
> Link
More
OTHER OPTIONS
Redact a PDF
Prepare a form
e.
ΑΙ
Digital Flywheel Program
The mobile app had huge amounts of data on the tastes and preferences of consumers. Thus, to
provide consumers with more personalized recommendations, Starbucks launched the Digital
Flywheel program in 2017. This program was built around the 4 pillars of rewards, mobile
ordering, payment, and personalization. Under the Digital Flywheel, the company implemented AI
in its Starbucks Rewards program and took into consideration factors such as order history of
consumers, time of day, weather, workday or weekend, to suggest food and drink suggestions to
the consumers. 34 The Digital Flywheel also sent push notifications to Starbucks mobile app users
to engage with them more effectively.
According to Starbucks global chief strategy officer Matthew Ryan, Digital Flywheel would merge
the physical touch points with the digital to "not only drive superior business results in the short
term, based on rewards, ordering, and personalization, but we also make it very challenging for
digital companies to outmaneuver us in the physical world."35
Within a year of the launch i.e. in 2018, the Digital Flywheel program led to a growth of 8% in
spending among Starbucks rewards active members. Commenting on the results, Schultz said,
"Our new one-to-one personalized marketing capability...will prove to be a retail industry
game changer.
Deep Brew
,,36
In 2017, Starbucks in partnership with Microsoft launched Deep Brew - an AI engine. The Deep
Brew algorithms were built on Azure wherein Starbucks could deploy ML on drive-thru menu
boards, enabling customers to order and pay on apps. The AI software adapted to consumers'
preferences and made product recommendations for them.
The data from AI was also used by Starbucks to understand the buying habits of consumers and this
data was used across different channels such as supermarkets. The company could decide with which
products the home drinker could be targeted and how to make changes to items on the menu to give
its consumers a delightful experience. The AI engine sent customized discounts and e-mails to the
consumers. The app could also track the location of the customer and provide directions to the
nearest Starbucks store. Users could engage with a virtual barista on the app as well by placing an
online order by clicking on the menu or by using the voice command feature on the phone.
The AI helped Starbucks in calculating the inventory needs of a store and how many baristas
would be needed every day. The employees thus saved time and used this time for better engaging
with the consumers.
37
The Deep Brew brought in huge success for Starbucks with the customer base reaching nearly 18
million by the end of 2019, with same-store sales growth of 6% in the US."
Internet of Things
While the digital transformation at Starbucks was meant to 'reignite' its relationship with consumers,
the coffee giant also used AI and Internet of Things (IoT) for preventive maintenance of its
equipment. The stores had coffee machines, blenders, and grinders which were operational for 16
hours a day. Any glitch in the equipment would result in a stalling of the company's operations.
In a bid to reduce such disruptions, Starbucks partnered with Microsoft to deploy Azure
Sphere to ensure that IoT-connected devices across its stores functioned properly. Microsoft
in association with Starbucks developed a device known as the Guardian Module for
connecting the equipment with Azure Sphere to aggregate data and find problems with the
machines. The company's Mastrena super-automatic espresso machines came equipped with
Azure Sphere comprises products and services from Microsoft with built-in communication and security
features for IoT devices.
Edit text, images, pages, and more.
Free 7-day trial
1479
APR
20
<tv
4
A
X
W
10
&
O
Ο
for
and (WITS).
Usage permitted only within these parameters. This PDF may not be reproduced, stored in a retrieval system, or uploaded to any LLM (e.g. ChatGPT).
Purchaaught by Fanny Saruchera, from 16-Apr-2024 to 21-Apr-2024. Order ref F506515.
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