Digital and mobile customer engagement has long been a driving force for customer loyalty at Starbucks. The company has invested in these critical pieces of the customer loyalty puzzle for many years now and CEO Kevin Johnson is confident that the company stands on firm footing in those departments.
During the company’s third-quarter earnings conference call on July 27, Johnson talked about what he believes are the two “critical, transformative elements” required for any brick-and-mortar retailer to survive, let alone succeed in the future: An emerging digital and mobile relationship with customers that is threaded into a branded and immersive experiential retail destination.
“Retailers who are agile and reimagine the art of the possible will be big industry winners,” Johnson explained. “Those who do not will struggle mightily. The evidence is clear that the pace of retail transformation is accelerating with a common theme: extending the in-store experiences to include relevant digital scenarios. It is the driving force behind combinations including Walmart's acquisition of Jet.com, the combination of PetSmart and Chewy.com, and last month's announcement of Amazon's intent to acquire Whole Foods. Each of these combinations demonstrates that pursuit of enhancing the physical retail experience with a relevant and complementary digital experience.”
Starbucks, Johnson noted, identified the “coming seismic shift” in retail years before it consumed the industry.
“And we are well positioned because we invested ahead of the curve to extend our global leadership around all things premium coffee and tea, developed world-leading digital and mobile capabilities linked to loyalty, create experiential third-place environments (after home and work), and deep authentic connections among our customers, our partners, and the communities we serve, providing an increasingly elevated and engaging Starbucks Experience,” he said. “Successful execution around each of these initiatives is why, despite the powerful retail headwinds and crosscurrents underway, Starbucks continues to produce record financial and operating results quarter after quarter, and open a new class of over 2,000 stores around the world every year that continues to outperform competitors and deliver industry-leading AUVs and profit, starting virtually from the day they open their doors.”
Johnson said Starbucks will continue to explore commercial partnerships with third-party digital companies.
“These partnerships, we believe, will enable us to leverage our brand, our global retail footprint, and the customer base to extend our reach, including into payments, loyalty, and social gifting among others, just as we are doing with great success in China with Tencent,” he added.
Carrie McIlveen, U.S. Director of Marketing for Metia, told Loyalty360 that it’s important for companies to connect with their customers through multiple channels now—both in-store and through the online experience.
“They should take a customer-centric approach by first understanding their customer mindset,” she said. “Customers want you to make it effortless. They want to shop in-store, but they don’t want that experience to be siloed off from their digital interactions with your brand. That means seamlessly connecting digital shopping experiences with physical ones, to allow customers to buy how they want when they want.”