Starbucks is Upping its Tech Game

Restaurant Tech Live blog post 1

Starbucks is stepping up to the plate when it comes to developing a winning digital strategy in the food and drink industry, which is seemingly only set to continue, given that the new CEO, Kevin Johnson, is a former Microsoft executive and CEO of Juniper Networks.

Johnson has stressed that the chain’s success will lie in how their digital relationships develop in conjunction with experiential retail in their store. According to Johnson, the chain is already well on its way to further expanding overall store capacity while offering an enhanced customer experience. 

Digital Development 

Johnson has credited Starbucks’ drive to further develop its digital strategy for turning around disappointing comparable store sales, as, by the end of the latest quarter, 1,800 of the company’s US stores were experiencing 20% or more of peak transactions from Mobile Order & Pay. This is in stark contrast to the start of the latest quarter in which the company posted 3% comparable sales growth, the fifth consecutive quarter of comp growth 1 point below consensus estimates.

The company ended the quarter with 13.3 million active Starbucks Reward members in the US, up 11% year-over-year. And 44% of all transactions (including gift cards) in the quarter were prepaid on the company’s proprietary payment platform.

Not content to rest on its laurels, Starbucks is continuing to improve its digital customer service. At the moment, the coffee giant is working on a new tablet-based device, the Digital Order Manager (DOM).This new development will enable baristas to better track incoming orders and manage the orders in real-time. Starbucks is also thinking about changing their store layout to be able to fully utilize this new in-store equipment.

A Critical Change in Consumer Behaviour

Of late, it’s evidently clear that digital innovation is greatly important for the restaurant industry amid a floundering retail environment.

Johnson has drawn reference to a recent Wall Street Journal article, which outlines that more retail stores have closed in the first quarter of the calendar year 2017 than closed in all of 2016, to highlight the need for companies to strive to innovate in order to adapt to the massive shift in consumer behaviour underway.

Following the Leaders 

Starbucks is not the only key industry innovator, as Dominos continues to operate at the forefront of mobile ordering in consumer foodservice. Since launching its Domino’s Tracker, in 2009, the company has revolutionized the customer experience by providing real-time updates on an order. Impressively, Dominos’ digital orders now make up more than half of the company’s sales.

The company has also widened its order options, as customers can now order through Facebook Messenger, Google Home and via emoji. The company has even been testing self-driving cars and drone delivery.