Starbucks Relies on AI Powered Customer Insights to Drive Growth

by February 1, 2019 0 comments


Not only does Starbucks process its coffee beans to satiate fans, but the giant also harnesses mounds of data to improve the customer experience and its revenue figures. Armed with 90 million transactions a week in 25,000 stores worldwide, the coffee giant is the front runner to deploy artificial intelligence and big data to help it into sales, generate revenues and take important business decisions.

According to CEO Kevin Johnson Starbucks has dramatically increased the use of AI-powered customer insights to drive growth and help it with strategic planning. During the most recent holiday season, Starbucks took some decisions based on data on a variety of items ranging from how they promoted gift cards to the type of holiday cups they were offering all designed with a motive to increase sales. Johnson credits these new customer insights have improved its gift card sales by four percent over last year’s holiday period.


Driving Bucks from AI

The CEO speaks that Starbucks has dramatically stepped up its focus on customer insights and is deploying technology to know the customer emotions and views about Starbucks.

Starbucks is driving artificial intelligence, use of analytics, technology and personalization to help it be more connected and more informed to its customers, which is making Starbucks a better company.


Customer Insights Driving Starbucks Growth

Starbucks’s growth strategy is framed around customer insights, from the last year’s holiday the giant has deployed research and used a number of tools to give it valuable customer insights on what its customers loved and appreciated about Starbucks at the holiday. This was an invaluable input into everything from utilizing the reusable red cup promotion to the design of its cups that was launched.

The giant is using customer focus groups, all kinds of data and resources to help it to be more informed and more front-footed on valuable trends pointing to what customers really want to see from Starbucks.


The Technology Investments are Not New

It is not the first instance that the major has used technology to drive its revenues. Starbucks has been an ardent user of front-line digital technologies into its retail of coffee and other associated products. With its Mobile Order & Pay app, Starbucks is the first major chain to integrate its digital payments to create a better buying and checkout experience for its customers.

Starbucks as a coffee retailer knows every nuance of its consumer’s coffee habits, thanks to its in-house Artificial Intelligence (AI) technology. Starbucks Barista, the face of Starbucks backed by AI, leverages voice-recognition technology to allow its users to speak to the app to place an order.


Customer Connect for Star Sales

Artificial Intelligence (AI), Internet of Things (IoT) and Big Data are the path-breaking technologies revolutionizing each and every industry. These disruptive technologies are gradually being adopted by retail vendors with Starbucks to drive sales and improve customer connect. Starbucks looks forward to evolving its platform with the most popular AI solutions to accurately deploy what it has learned from its customer’s behavior in a bid to serve them better.

It is a delight to witness how AI can further help Starbucks in achieving its goals discussed above while also ensuring to give the chain an edge over competitors like Dunkin. The company envisages that AI will likely influence all the major business verticals with major ethos to the retail sector.


Personalizing the Starbucks Experience

When Starbucks launched customer-focused mobile app and rewards program, it increased the data collected and the giant could use this to understand its customers and extract information pertaining to their purchasing habits. The Starbucks mobile app has more than 17 million and the Starbucks reward program has 13 million active users which are growing. The millions of users can create an overwhelming amount of data about their location, preferences and buying habits, which is a data goldmine for the giant. Additionally, data which includes weather, holidays and special promotions are added on to the rich database.


Personalized Marketing Forms the Core

The Intelligence that helps Starbucks suggests new products launches helps the company send personalized offers and discounts to its customers that go way beyond a special birthday discount. With a core focus on Customer Centricity, the giant sends a customized email to any customer who hasn’t visited a Starbucks recently with enticing offers drawn from the customer’s previous purchase history to get them hooked to the brand.

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