Starbucks Elevates Service with Digital Technology Success

Success does leave clues and chain restaurants once again can watch how Starbucks drove year over year sales with digital innovation according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

The momentum from digital innovation is credited for driving a 4% jump in U.S. same-store sales for its most recent quarter, but the coffee giant is still having trouble cracking the code to unlock a traffic boost much like the rest of the chain restaurant sector.

Starbucks added 1 million active users to its “app-based members-only program in Q1 2019—a year-over-year increase of 14% and the company’s largest jump since 2015—and now has 16.3 million customers enrolled in the rewards program”.   Starbucks loyal users typically outspend other customers, according to Starbucks which is the case for most retailers. 

Expanding it digital focus with delivery, Starbucks revealed plans to expand delivery  to six new cities in coming weeks, said it is working to upgrade its software so customers can place delivery orders directly through the Starbucks app and not just via Uber Eats.

Starbucks revenue increased 9% to $6.63 billion for the quarter. Transactions, however, remained flat, and the comps boost was due in large part to a 3% lift in average check size.

Kevin Johnson Starbucks CEO stated “We are particularly pleased with the sequential improvement in quarterly comparable store transactions in the U.S., underpinned by our digital initiatives and improved execution of our in-store experience,” Remember, Kevin Johnson came from Microsoft so integrating technology is something he understands.

The company reported growth in iced beverage sales and announced plans to expand its nitro coffee line from 40% of U.S. stores this quarter to 100% of units by the end of the fiscal year. “This platform is differentiated, provides theater and drives incrementality,” Johnson said.

Technology has invaded consumer life in the way of the smart phone and integrating pro-active marketing directly into the palm of your customers hand is an intrical part of brand marketing today.

Invite Foodservice Solutions® to complete a Grocerant Program Assessment, Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®.  Since 1991 www.FoodserviceSolutions.us  of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869