Tag Archives: Starbucks

Fast Company is Wrong


Starbucks the Real Winner in Amazon Go Collaboration

Recently Starbucks announced a collaboration with Amazon Go on a New York City store that combines Starbucks Pickup concept with Amazon’s Go concept.

A Fast Company article titled Starbucks and Amazon team up on their first store, but I can’t see what’s in it for Starbucks tries to assert that the collaboration is ridiculously titled in favor of Amazon Go.

I respectfully disagree.

Customer Experience Learning Delivers Starbucks More Learning Than Amazon Go

Lost on Fast Company’s Mark Wilson is the incredible value to Starbucks to not only learn about Amazon’s Go technology, but more importantly to observe how their customer experience is impacted by the introduction of the Amazon Go fortress gates and related surveillance technology.

Starbucks can gather incredibly valuable customer insights from the answers to these and other questions:

  1. How does dwell time in the concept store compare to other New York City traditional Starbucks locations nearby?
  2. How is purchase size per customer visit impacted?
  3. Is there an uptick in grab ‘n’ go purchases versus Starbucks’ own grab ‘n’ go items?
  4. How do customers feel about the presence of the Amazon Go security gates and all of its necessary surveillance cameras?
  5. How does the composition of the customer experience in the Amazon Go concept test location affect visit frequency?
  6. How does the composition of the customer experience in the Amazon Go concept test location affect brand perception?
  7. How does the composition of the customer experience in the Amazon Go concept test location affect customer loyalty?

There is more to ongoing success in business than the quest for hyper-efficiency or profit above all else. Creating a valued and differentiated customer experience matters. In the same way products can become commoditized, services, and even experiences can be commoditized to.

Continuous Experimentation is Worth the Investment

Continuous experimentation is just as important for customer experience design as it is for mature product design and service design practices. Companies like Chick-fil-A, Kaiser Permanente, and OSF HealthCare have invested in facilities to prototype and test potential alterations in their service and experience delivery. I’ve had the opportunity to visit all three of these facilities in person and the privilege of advising one of these three organizations. It is harder to conduct experience experiments, but not impossible – and incredibly important.

It is because of the greater challenge of prototyping experiences and gathering accurate feedback that Starbucks stands to gain more from this collaboration with Amazon Go. And while Starbucks could easily replace Amazon Go with a competitor, Amazon isn’t likely to start their own global chain of coffee houses.

If you haven’t already come across this article, this article by Larissa Gomes is worth a read:

Amazon Go has competition: Meet 6 other automated stores transforming retail

Not mentioned in the article is startup Standard Cognition:

Final thought: You may also notice in the picture at the top of the article – if you look closely – the last minute technology investment I highlighted in my last Starbucks article.

Keep innovating!

Image credits: Starbucks

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Starbucks Upgrading the Last Minute of the Mobile Ordering Journey

Starbucks Upgrading the Last Minute of the Mobile Ordering Journey

Starbucks is definitely regarded as an innovator in the mobile commerce and loyalty space.

Starbucks was one of the first retailers (2008) to successfully introduce a card-based loyalty program with broad adoption – the Starbucks card – which not only had loyalty benefits for customers but also could be used as a means of payment.

Building from this, Starbucks created a mobile app early in the smartphone era that mirrored many of the capabilities of the Starbucks card, allowing people to not only pay with their mobile phone (backed by a credit card), but to check their points and payment balances.

Starbucks then launched mobile order & pay in Portland near the end of 2014 before beginning to release it more broadly in 2015.

All of Starbucks’ loyalty and mobile technology inventions positioned the company quite well to survive the COVID-19 shutdowns around the world.

Starbucks Mobile Ordering

Personally I try to keep as many apps OFF my phone as possible. So, it wasn’t until the coronavirus restrictions that I finally caved in and downloaded the Starbucks app. The reason?

Given the pandemic, the last thing I wanted to do was stand around in an enclosed space with suspect ventilation waiting for my Starbucks beverage any longer than I had do. So, I downloaded the app and began ordering my drink from the car and waiting 4-5 minutes (or longer if they looked busy) before going inside to get my drink.

What I found annoying though was that the app gave an estimate that often was in the 15-23 minute range, despite the fact that it rarely took more than five minutes, and there was no notification when my drink was ready.

I started designing a better approach in my mind, and was about to suggest it to Starbucks when I happened upon what is likely a pilot in one of my local Starbucks. It looks like this:

Starbucks Mobile Order Board

At this particular pilot Starbucks they have this flat screen that shows the people who have mobile orders placed (in alphabetical order) and then the Starbucks employee at the end of the line has a tablet they manage.

When an order is complete, the Starbucks employee updates the order status to ‘READY’ on the tablet, the image on the board changes to show a READY indicator, and a text message is sent to the person’s phone.

When the customer picks up their order, then the Starbucks employee marks it ‘PICKED UP’ on the tablet so that the person’s name is removed from the board.

This is very close to the idea that I was going to propose, but with one big exception.

My idea was to suggest printing out an enhanced bar code that could be scanned at the end of the line by the barista to trigger the text message – instead of using a tablet and a screen. This could have been a much simpler and cheaper approach both in terms of technology and labor.

Either way, there is no doubt that Starbucks continues to experiment and push for improvements in the last minute of the mobile ordering journey to create a great experience. This enables them to keep their employees and customers healthy and safe, and keep Starbucks ahead of their competition.

Keep innovating!

Image (2) credit: Digitaltrends.com

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Are Gas Stations the Future of Starbucks?

Are Gas Stations the Future of Starbucks?

Recently the Seattle Times published an article from the Washington Post highlighting a gas station in Maryland that has made the bold move of turning off its gas pumps and installing electric charging stations in their place. Which got me thinking…

Given that in the early days of automobiles you had to go to the pharmacy and buy gasoline in open containers before an evolution began to curbside gas pumps before finally arriving at the drive thru format we have today, why would it be crazy to think that we are due for the next reinvention of refueling now that electric vehicles are beginning to catch on?

And what might a “gas” station v5.0 look like?
(the first four generations being pharmacy, curbside, drive thru full serve, and self serve)

Curbside Gas Station

Given that it takes 15-30 minutes to quickly recharge an electric car, a “gas” station v5.0 may very well end up looking like a Starbucks.

Are people going to want to hang out in their cars while they recharge?

Wouldn’t they rather chill out in a Starbucks sipping on a latte (or a hot chocolate) while they wait for enough juice to keep rolling down the road?

So shouldn’t Starbucks be considering entering the “gas” station business?

Or is the somewhat random growth of electric charging likely to continue?

The answer for me is of course both…

In urban environments I would imagine the trend of a lot of one-off charging stations to continue.

But if I were Starbucks I would look at the interstate highway system and consciously set up Starbucks locations next to gas stations and install electric vehicle charging stations as part of the design. That way you get business from the large number of internal combustion drivers and the small number of electric vehicle drivers now, while those numbers gradually invert over time.

Starbucks Electric Charting Station

Maybe Starbucks could even do a deal with Tesla Motors like they did with Fred Meyer (a small superstore chain with groceries that is part of the Kroger family). Or maybe Nissan or GM want to get in on the action instead.

What do you think?

Image credits: Starbucks, American Oil & Gas Historical Society, Chargepoint

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Fix the Problem or Design it Out?

Fix the Problem or Design it Out?

Let’s start with the problem.

According to The Plastic Pollution Coalition (January 3, 2017) – “It’s National Drinking Straw Day! Each day, more than 500 million plastic straws are used and discarded in the U.S. alone. Plastic straws consistently make the top ten list of items found, according to Ocean Conservancy’s International Coastal Cleanup data. In the last three years, plastic straws have climbed the list to the Number 5 spot.”

The Paper Straw Movement

In response to this growing problem, in January California made it illegal to give customers plastic straws unless they expressly request one.

Another way some restaurants have tried to to fix this problem has been to replace plastic straws with paper straws.

Or then there is the tasty fix to the problem, the cookie straw.

Starbucks Cookie Straw

But there is another way to approach problem solving, and that is to design out the problem instead of trying to fix it.

Recently a barista at Starbucks accidentally gave me a lid on my water cup that I wasn’t expecting.

I had heard that Starbucks was planning to reduce their use of the iconic green plastic straw, but I kind of assumed that meant they were shifting to paper straws like some other quick serve restaurants, but that is not what they have in mind at all.

Starbucks is instead planning to eliminate the plastic straw.

Instead of focusing on the straw they instead chose to focus on the lid and design it in a way that a straw isn’t even necessary.

Starbucks Sippy Cup

So, next time you’re wrestling with a problem and trying to solve it, look at it in a slightly different way just for fun, try asking yourself how you could design the product, service, or experience (or all three) in order to design out the problem.

You may or may not get to a more viable, desirable, and feasible solution than trying to fix the problem.

But, looking at the problem from a range of different perspectives is always worth the effort.

Keep innovating!

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Starbucks Train Making Connections with Customers

Starbucks Train Making Connections with Customers

What happens in Switzerland if you forget to buy your latte or cappuccino before you get on the train?

Well, Starbucks has taken the next leap in connecting with customers as they make their rail connections, moving beyond retail locations in train stations across Europe to opening its first store on a Swiss Federal Railways (SBB) car, the national railway line for Switzerland.

Starbucks Train InteriorThe new Starbucks train café is one of the smallest the company has ever designed, and they have managed to include space for 50 people, baristas, a pastry case, standing bar, and a lounge area, all tastefully assembled into a two level train car.

This latest Starbucks retail twist may only be a test, and the first of its kind for the company, but it now officially puts them in planes, trains, and automobiles, and is a smart way to extend the customer relationship and maintain their connection with existing customers while also possibly building new ones in a captive audience situation.

It’s a smart move for Starbucks to test this format even if it fails like Amazon Tote.

Starbucks Train CustomersIt’s incredibly important for companies like Starbucks that sell daily indulgences to be in the places where people are looking to enjoy that little treat, and with the level of quality increasing (at least in the coffee experience) at competitors like Dunkin Donuts, McCafe, Caribou Coffee, and others, Starbucks has to do everything they can to reinforce their premium image and customer loyalty.

The questions every retailer (or business for that matter) must continuously ask themselves include:

1. What type of customer relationship do we have?
2. What type of relationship does the customer have with our product or service?
3. What products and services do we have our customers’ permission to provide?
4. Where do our customers want us to be?

If you have a copy of my popular five-star book Stoking Your Innovation Bonfire, you can dig into the ideas behind these questions more in Appendix A where I look at a number of different “Customer Relationship Types” and “Levels of Customer Permission” in an effort to help you maximize the customer relationship

If you are looking for additional opportunities to serve your customers, maintain existing customer loyalty, and to build new customer relationships, you might also want to check out Appendix B in Stoking Your Innovation Bonfire, where I get into my framework for visualizing the customer purchasing journey and my framework for visualizing the core business operations that support the customer purchasing journey.

And then when you’ve got some ideas that you want to possibly pursue, you might want to run them through The Innovation Baker’s Dozen framework in Appendix C.

There is a lot of great content hidden in the book in various places, which is why it has done so well, and this exploration of the new Starbucks Train is the perfect time to highlight some of the insights captured in the appendices.

So, ask yourself the four questions above, check out the appendices, think about what Starbucks has done with their espresso train and let me know what you come up with!

Here is the official video announcing the Starbucks and SBB collaboration on the Starbucks train experience:

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Philadelphia – Food Fail

Kraft Philadelphia - Food FailIn a continuing series of articles exposing the gradual degradation of our food supply, I’d like to highlight what used to be called Philadelphia Cream Cheese, but now you will notice that the logo has dropped the cream cheese phrase from the logo.

Why is that you might ask?

Kraft Philadelphia - Food FailWell, Kraft might say because they are trying to extend the brand into new areas, but I would also say that, hopefully, legally now (or soon) they can no longer call it cream cheese because really it is no longer cream cheese, but is now instead is a cream cheese spread.

Cream cheese is technically cultured milk (you can use yogurt) that has been strained of its whey and you can even make it at home using whole milk yogurt.

If you look at the ingredients of most cream cheeses, or sour creams, or chocolate milk and possibly even some yogurts, you will notice that one of the ingredients will be carageenan or some kind of tree gum like xantham gum or locust bean gum. Some of these products even though they are no longer the food you might think they are, you will find might even be labeled “All Natural.”

You will notice that if you get a bagel and cream cheese at Starbucks that the packet they give you is labeled “cream cheese spread”.

At least Starbucks is honest about it that they are not really giving you real cream cheese, but you will notice again the presence of a qualifier word – “spread” – just like honey sauce from KFC.

And if you have any doubts in your mind whether cream cheese can or sour cream be made without these tree gums, check out the products from the Springfield Creamery sold under the Nancy’s brand on the west coast:

Nancy’s All Natural Sour Cream
Nancy’s All Natural Cream Cheese

So, Kraft and Starbucks and others are unfortunately responsible for providing another terrible example of cost cutting gone mad, degrading our food supply again as a result.

What is your favorite food fail story?

Stay tuned for more high profile food fails…

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A Refreshing Approach to Product Innovation

A Refreshing Approach to Product InnovationSometimes it is better to be late than never. Starbucks recently announced a new line of energy drinks – Starbucks Refreshers. There are two flavors Cool Lime and Very Berry Hibiscus and instead of copying other energy drinks, and use the same active ingredients as the usual suspects, they instead decided to use something uniquely Starbucks – green coffee extract.

Starbucks Refreshers are coffee drinks that don’t look like or taste like coffee, but provide the caffeine jolt that many of their customers are looking for nonetheless. And as an added bonus, they are coffee drinks that are much lower in calories and fat than many of their traditional hot or iced lattes. Coffee for the lactose intolerant too!

Starbucks has done something else smart, and that is that they have created a self-reinforcing product loop that allows for three different preparations and use cases for the same basic product, all in a single summer product launch:

  1. A customizable cafe preparation with multiple sizes and fresh fruit
  2. A canned, chillable pre-mixed portable preparation
  3. An extremely portable VIA DIY preparation without the water

In addition to being sold in their stores and licensed locations, the can and VIA preparation can be distributed via Starbucks’ existing grocery distribution channels.

Starbucks Refreshers are a great example of taking components of your brand and other organizational assets and leveraging them to create new products that people might not have thought about you creating, but that feel like natural extensions to them instead of a stretch.

Starbucks Refreshers are also a great example of looking at your raw materials in a new way and as a result a new product solution in born.

What might happen if you looked at your raw material inputs in a new way?

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How Leading Organizations Manage Their Open Innovation and Crowdsourcing Efforts – Part Two

How Leading Organizations Manage Their Open Innovation and Crowdsourcing Efforts - Part OneIf you missed How Leading Organizations Manage Their Open Innovation and Crowdsourcing Efforts – Part One, you can find it here.

So what do leading organizations do to encourage the successful use of external talent?

They build a solid foundation:

  1. Seek to understand where the challenges will lie in the transformation
  2. Have passionate business owners
  3. Secure top level support
  4. Make a long term commitment to the use of external talent
  5. Negotiate master agreements with external talent providers at the center
  6. Create a common language of innovation and external talent
  7. Implement the processes and systems to manage and measure innovation efforts

They get strategic:

  1. Create an external talent strategy
  2. Make a plan for achieving the strategy
  3. Attach goals to the strategy (e.g., P&G’s 50% goal)
  4. Communicate the goals of the strategy and measure goal achievement

They focus on communications and ownership:

  1. Do not underestimate the importance of communications, education, and dialogue
  2. Create guidelines for when and how to use different external talent sources
  3. Have someone own and manage the external innovation efforts
  4. Have owners and champions in place in different business units or product groups
  5. Educate employees on how to engage owners and champions

They continuously reinforce their efforts:

  1. Recognize and reward those who go outside
  2. Weave external focus into internal systems (e.g., innovation system prompts)
  3. Get cross-functional input into problem definition and challenge formation
  4. Make resources available for integration
  5. Work to make the organization more flexible and adaptable

In addition, successful organizations understand that it is about making and maintaining connections and community – you build it for when you need it, instead of building it when you need it. Successful organizations understand that attracting and managing external talent is as important as finding and hiring the best internal talent, and are changing their budget allocations to fit this new paradigm. The role of HR in the near future will not be just to recruit, develop, and manage staff, but also to build and curate talent pools. The HR profession will have to build new core competences in network orchestration and managing talent – no matter where the talent lives (inside or outside the organization). It is time to start preparing.

Build a Common Language of Innovation

Before moving on to the final section, let us look at a few brief examples of different companies engaging external talent for business success and one case study of a leader pushing farther:

  • Threadless decided to base their whole business on external talent and build a community of designers and customers that they could leverage to come up with the t-shirt designs that they sell.
  • Quirky has taken the Threadless model of utilizing external talent to simultaneously make invention accessible and build a consumer products company. You submit your idea, the community curates it, the company evaluates it, and actually produces and sells the chosen inventions online, and even at a handful of retailers.
  • P&G went outside with a plastic technology and created a joint venture with competitor Clorox that focuses on trash bags, food storage, and related areas.
  • Intuit uses its Collaboratory web site to connect with entrepreneurs and to publicize their open innovation challenges, and their Labs web site to engage with the developer and customer communities to get immediate feedback on some of their experiments in order to engage in some level of co-creation.
  • Psion Teklogix has built one of the more robust corporate open innovation communities – Ingenuity Working – complete with a video from their CEO front and center.
  • SAP has started The Global SAP Co-Innovation Lab Network (aka COIL) with HP, Intel, NetApp, Cisco, VMware, and F5 Networks to facilitate project-based co-innovation with its members and to enhance the capabilities of SAP’s partner and customer ecosystem through an integrated network of world-wide expertise and best-in-class technologies and platforms.
  • MyStarbucksIdea.com is an example of engaging the creative energy outside your organization that most companies will not want to follow. They throw things wide open for all idea submissions, not focused on any particular challenges, for all to see. As a result, Starbucks exposes the company to the risk of brand equity destruction from not following through on suggestions. At the same time, this approach provides free market research for competitors and creates a lot of sifting and communications work for internal resources.

If you missed How Leading Organizations Manage Their Open Innovation and Crowdsourcing Efforts – Part One, you can find it here.

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Personal Innovation – Star Shining Example

Personal Innovation - Star Shining ExampleI came across a queue reduction application for the iPhone and iPod Touch four years ago that was intriguing. At the time it looked like the application wasn’t quite finished or certified for use yet by Apple and Starbucks, but from what I gathered at the time it was meant to work something like this:

  1. User comes in range of a Starbucks WiFi Hotspot
  2. Application recognizes the Starbucks WiFi Hotspot or user initiates application
  3. Application engages the user interface portion of the application
  4. Application makes a connection
  5. Application prompts user to order a Starbucks beverage
  6. Application user interface facilitates the selection and transmission of the drink order (including a list of saved favorites to speed the process)
  7. Application connects to the user’s iTunes account
  8. Application deducts funds from the user’s iTunes account
  9. Application creates a visual barcode with the information necessary to register payment
  10. User places iPhone or iPod Touch with visual barcode under a reader at the pickup counter
  11. User collects their beverage

The visual barcode (semacode) and scanner portion of the system could be made unnecessary (or relegated to backup system status), by instead transmitting a payment confirmation to Starbuck’s on-site systems directly via the WiFi connection. In the backup scenario, the visual barcode would serve as an electronic receipt to show proof of payment in case the systems in the store doesn’t receive the systematic payment immediately.

Imagine the convenience of getting a block or two from your favorite Starbucks, connecting, clicking ‘The Usual’ and proceeding directly to the drink pickup counter instead of waiting in line to order and pay.

Of course there is no reason why companies like McDonald’s or Cinemark couldn’t create similar applications to eliminate some of the queueing from our lives. If people could order this easily with their phones then businesses could reduce staffing or reallocate resources from order taking and payment processing to more value-added activities like preparing food or beverage orders.

Apps like this could be extended to the Web through the introduction of a store number field or store locator mini-application or pulldown at the beginning of the application sequence. This would allow you to order out of range of the in-store WiFi over your cellular network or from your home or office internet connection.

Less time spent waiting in lines?

Oh what a beautiful world.

But, as I looked to refresh this article from 2008 and bring it to the Innovation Excellence readers I checked back and it turned out that the creator, Phil Lu, is a designer and created this as a mockup not as real app. This is a great example of shining your star and engaging in personal innovation. Just look at all of the coverage he got of his design and visioning skills for this prototype back in 2008 when I first wrote this article.

If you missed my previous personal innovation article on shining your star, it is here.

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Growing Demand for a Third Place

Growing Demand for a Third PlaceI’ve been meaning to write this post for some time, and am finally getting around to it, so hear goes…

As I look around the economic landscape in the United States and see a climate where not only home prices but also rents are falling in many geographies, especially as the results of an all-advised rental property construction boom become available. I find myself thinking that we are in the middle of a profound shift in the American reality.

I think we are in the middle of an unexpected regression back to more multi-generational housing and a return to increasing levels of co-habitation amongst the young. Now when I speak about co-habitation here, I’m not talking about couples living out of wedlock, but instead I’m talking about more people living with roommates – and not just the young. In the future I believer we’ll see not just the young co-habitating, but older people too.

So, two housing demand destroying events coming together at the same time. But besides a decline in home prices and rents, there is another important impact of this changing American reality that I don’t see being addressed…

As more people live with roommates or in multi-generational housing situations and seek to get to get out more for some thinking and breathing room, there is going to be an increasing demand for more third places.

Starbucks and the Third PlaceFor those of you not familiar with the third place concept, coffee shops like Starbucks are one of the most famous examples, but there are other third places in the United States. There is the shopping mall (you know it’s true), the convenience store (see Bill & Ted’s Excellence Adventure), the YMCA, the Boys and Girls Clubs, and the Public Library. It seems like the latchkey kid phenomenon has become the library kid phenomenon. Kids leave school and go to the library and hang out there until their parents get off work and come by to pick them up.

Some shopping malls have installed free wifi, giant chess boards, and tables for people to use laptops or play games. Cities and YMCA’s have created teen centers. But one thing I have yet to see that I am waiting to see is a transformation in the mindset of the companies that run fast food chains like McDonald’s, Burger King, Taco Bell and others. When you go into a Starbucks it is very inviting and it is a happening place with old friends meeting up, kids sitting around doing homework, small business people working, and job interviews taking place. But when you go into a McDonald’s or other fast food chain, most of the time they are empty places designed purposely with uncomfortable seating, harsh lighting and other touches to make people get in and out as fast as possible. Most fast food chains do a booming drive-thru and carryout business, but not a lot of people stay and sit down. Nobody wants to hang out in an uncomfortable place.

But what would happen if McDonald’s or some other fast food retailer changed their thinking to create a third place environment to fill their empty seats?

How many more customers would they attract and engage?

How much more loyalty would they build?

How much more of their customers’ fast food spend would they achieve?

In my mind these are questions worth asking, and the biggest one is which major chain will move first?

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