by Stephanie Overby

How Starbucks Brews Its Mobile Strategy

Oct 25, 20123 mins
CRM SystemsIT StrategyMobile

The coffee retailer's chief digital officer describes how he focuses first on the customer experence before making any technology decisions

Ask Starbucks’ Chief Digital Officer Adam Brotman about the company’s mobile strategy and he might well tell you it doesn’t have one.

It’s an odd-sounding answer from a prime mover in mobility–the $11.7 billion coffee retailer has been experimenting with mobile technology since 2007 as an early adopter of everything from smartphone payments to mobile ordering.

But “we don’t look at mobile in a vacuum,” says Brotman, who joined Starbucks four years ago. “We have an overall digital strategy that’s all about building relationships with our customers, and that strategy runs across a number of digital touch points. We’re looking at mobile, Web and social to think more holistically about how we engage with our customers and tell our story.”

Starbucks, which had long eschewed traditional advertising in favor of interacting directly with customers through its approximately 149,000 employees, is using digital technology to reach out to its customers even more directly and personally.

And, it seems, there’s nothing more personal than a customer’s mobile device. “It is literally an extension of a person. They always have it with them,” Brotman says. “And there are a number of native capabilities in mobile devices that a desktop doesn’t have. In some cases, it’s the only platform, by definition, capable of doing things like mobile payment and geo-centric targeted communications.”

The company has been moving fast and furiously into a number of mobile applications and partnerships in recent years. Its own app includes a 2-D barcode scanning system for mobile payments–which quickly became one of the most widely used in the country, with more than 70 million U.S. payments to date–as well as loyalty card information, store finders and personalized information about what’s happening in a customer’s local store or what the company is doing in his or her community.

For Starbucks, the early adoption of mobile technology has been less risk than requirement. “The combination of our brand, our customer demographics, our footprint and our frequency make mobile a natural fit,” Brotman says. But there are challenges inherent to mobile development.

It requires discipline and strict attention to quality assurance when choosing, for example, which platforms to support and which features to roll out first. Then there are the security considerations involved in dealing with mobile payment and customer account information.

But the biggest challenge “is just being realistic about what we can actually accomplish at one time,” says Brotman, who oversees the digital strategy for 18,000 retail locations in 60 countries.

“Customers have embraced what we’ve done so far, and we have a robust road map of what we want to do next.” The trick to keeping up the pace is that there is none, he says. “It’s just a lot of hard work–sitting down cross-functionally, getting aligned [with] our priorities and the resources available, and working our way through it.”

It’s critical to resist the urge to put technology first in the quickly evolving mobile arena, ABrotman says. “You have to start with the customer and what you’re really trying to do from a customer-Arelationship perspective. Then you can work backward to what the user experience will be, and then work backward from that to develop a technical solution.”

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