CASE STUDY: Starbucks battles COVID with data

Global coffee chain Starbucks is using data to empower human connection through the COVID-19 pandemic

The pandemic has hastened the speed at which businesses have needed to transform digitally. As a result of lockdowns, curfews, and distancing measures, customers simply aren’t in just one place – and are instead existing and living in a so-called “third space”. Through times of uncertainty, people crave familiarity and long for experiences they could enjoy in pre-COVID times. Businesses have had to pivot to a digital-first mentality to continue to deliver in a totally different environment. Although businesses have changed, customer expectations haven’t. Starbucks, in particular, is a brand that consumers relied on daily, in person. It was a part of many people's daily routine, so it was vital they continued to service customers in the same way.

When COVID-19 hit, Starbucks had to shutter stores for the first time ever and rely on their mobile app and drive-through windows to serve customers. And they needed to do all this while keeping their staff, and customers, safe. While dealing with new territories and uncertainty, the business knew it had to lean on something it could trust - data.

Turning to what they did know allowed Starbucks to use data to guide them through these challenges, and it helped them transform the business practically overnight. Although it was a testing time, it gave the business the catalyst to reinvent itself, using the time as a test-bed for how things will be done in a post-pandemic world. Starbucks was able to leverage data and analytics to deliver against customer expectations, while offering a human connection in a safe way.

This included a significant change in the way Starbucks interacted with customers, including a move in the morning rush to a steadier flow of all-day orders. The brick-and-mortar experience shifted into one in which customers ordered through a mobile app and safely picked up drinks outside the store, keeping transactions as contactless as possible. They also had to arrange for deliveries.

Insights

To enable this digital transformation, Starbucks’ Analytics & Insights and Technology Data & Analytics teams worked together to quickly develop a top line report. The goal being to deliver insights to the right leaders and teams, equipping them with a holistic view of what was happening in-store in almost real-time. It democratised the data and gave everyone the information they needed to make informed decisions and move forward.

With 2020 in hindsight, Starbucks is ready to leverage what they learned to build their third place experience across local communities in more than 80 markets. To do this, they need to use their data to develop experiences that continue to meet and exceed customer expectations wherever they are. In the US, Starbucks will continue to grow its mix of new store formats and experiences, including Drive-Thru, Starbucks Pickup, and curbside pickup. And with multiple third place points of contact, Starbucks needs to ensure that its technology works seamlessly upon every point of contact, whether it’s in-store, curbside, or for delivery.

With their data foundation in place, they can quickly surface relevant analytics and visualisations, powered by Tableau, to retail and non-retail partners alike. During the pandemic, this allowed them to create new safety protocols, and expand benefits and compensation to support partners to make sure that no Starbucks partner would have to choose between coming to work and their health. They even launched a COVID Community Information Exchange with other nearby retailers and are now looking for other ways to leverage that.

For their customers, data enabled Starbucks to quickly adapt to short and long-term shifts in behaviour. They found that people still needed to feel seen and connected, and the retail experience had to be consistent and fit their lifestyle. The data told them that customers still expected high-quality, sustainable products and experiences that support people, and the planet.

Transparency

Of course, all this work with data must be done with trust at the core. Starbucks is passionate about data transparency and providing a strong, secure governance experience. Internally, they provide a full picture of their data that is available to all levels of retail leadership and partners to give them a greater sense of the business and encourage accountability for P&L of that store. Their top line reports have specifics around site selections and other criteria so partners also understand how the data comes together to make the right decisions. Their goal is to have every partner embracing and using data.

Additionally, the data and analytics teams are working on future capabilities around hyper-personalisation and radical automation, focusing on how to use data to make better-informed decisions and freeing time for partners to have human-to-human connections. Customers can soon expect a more personalised digital experience, made possible by their AI initiative called Deep Brew. This will be tailored to where customers live as well as their preferences and habits, allowing for deeper connections between Starbucks and its customers.

In times of rapid change, enabling adaptability has never been more critical. Organisations that can absorb the shocks of change can not only overcome volatility, but even benefit from it.