How Starbucks Disrupts Its Own Marketing Strategy?

Reserving your lunch or dinner, and a nice bottle of wine? Believe it or not, but that’s now possible for Starbucks customers in the US. We took a look at the coffee giant’s new business and marketing strategy.

Starbucks is going beyond coffee and will focus on selling lunch and dinner. Also the mobile phone will play a new strategic role in the Starbucks transformation.

The famous coffee brand will even carve the word ‘coffee‘ out of its logo! That shows dedication and determination to increase revenues and profit, right?

How The Trend eCommerce Forces Starbucks to Carve out Coffee

The main reason for this delicate transformation? More and more people are shopping online and visiting retail areas in cities less often.

That’s why Starbucks expects a declining trend in coffee related revenues. In 2013 its revenues went up by 5% but in the first 6 months of 2014 that went down to just 1%. Time to move up?

With its new business strategy (lunch and dinner), Starbucks wants to increase its total revenues by 10% the coming 5 years. Also its profit per share should go up by 15 to 20%.

The mobile phone will play a crucial role in Starbucks new strategy. The use of Starbucks mobile loyalty app increased by 50% in 2014.

Now Starbucks wants to launch a new mobile ordering and payment system, which will dramatically speed up the service for its customers.

Starbucks already has 32 stores in the USA where dinner is being served. That number should go up to 2.700 dinner stores in the coming 5 years.

MyStarbucksIdea: Masters of Open Innovation

I have learned that quite some people are not a huge Starbucks fans. But I tend to make my marketing opinion on emotions mixed with fact-based arguments.

Well to be bold, I have heard so many CMOs roar on quarterly basis with something they want to promote. And they always do so by intrusive advertising campaigns.

A TV campaign with some radio spots, OOH flight, some digital display and not to forget their attempt to buy or bribe some people to like their Facebook page.

Starbucks however, is one of the only brands that has understood how to go beyond campaigns, creating an ongoing marketing program.

That’s why I would like to point out MyStarbucksIdea to these criticasters.

The platform launched over 5 years ago, is truly any CMOs wet marketing dream. It combines social listening, social CRM, the wisdom of crowds, the sharing economy and open innovation in brillaint ways.

A perfect piece of integrated data-driven marketing strategy in which their CMO and CIO clearly joined forces.

In 5 years 277 consumer ideas were generated and implemented. Now that’s pulling customers through the funnel, towards trial, loyalty and advocacy.

Beyond marketing and innovation, this is also a very powerful owned media channel. The platform has generated so many eyeballs and so much positive buzz and PR, incredible.

Last but not least, it has made Starbucks a love brand among many of its ‘floating’ customers (possible churners) that feel heard, understood and really greatly appreciated.

Shall we also estimate what MyStarbucksIdea share of savings could be per year on their R&D costs?

I can tell you – because I happen know this business case – it is saves Starbucks tens of millions. Each year.

So coffee, tea, dinner or lunch… they have deserved my benefit of the doubt.

My Opinion

The strategic re-shift is a bold move by Starbucks. Carving the word coffee out of its logo, well no guts no glory?

Starbucks is acting on trends and that is always smart. The saturation of the fast-food and coffee market is a clear fact. And eCommerce will only decrease offline retail revenues further.

Since we all know that old economy corporates often struggle to adapt and to find new business models in time, it like the green coffee giant is jumping, and not going to be another boiling frog.

What About You?
Is this coining the trends with great timing and a clever move by the coffee giant? Or is it suicide? Share your ideas in the comments.

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About the Author

In the spotlights, Igor Beuker is a top marketing innovation keynote speaker and futurist known for his foresight on trends and technologies that impact business, economy, and society. Behind the scenes, a serial entrepreneur with 5 exits and an angel investor in 24 social startups. Board member at next-level media firms, changemaker at Rolling Stone Culture Council, Hollywood sci-fi think tank pioneer, award-winning marketing strategist for Amazon, L’Oréal, Nike, and a seer for Fortune 500s, cities, and countries.

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