Tag Archives: Starbucks

Starbucks Train Making Connections with Customers

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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

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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

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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

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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

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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

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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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