Starbucks as a tech company: Why the coffee giant is investing heavily in digital innovation

Coffee giant Starbucks is planning to leverage technology to transform its business in a big way with customer experience at the heart of it. Digital initiatives include scalable cloud-based platform for rewards and ordering, improved customer data organization, and tighter integration with store-based operating systems. The company is also looking to tap on Artificial Intelligence (AI) to customize the customer experience through its latest ‘digital flywheel’ platform. By using AI to determine the preferences of their loyalty customers (in the Starbucks Rewards program), this would make it possible to significantly enhance the customer experience.

The retail sector is being heavily disrupted by technology. Moving forward, the only way traditional brick and motor stores can effectively survive would be to combine their in-store experience together with a digital experience. With this move, Starbucks seems to be making strides in the right direction. It also has the benefit of visibility with an extensive physical retail presence — 27,000 stores in 75 countries serving roughly 90 million customer visits each week. Going digital could well transform the coffee business the way we see it.

According to Starbucks Chairman Howard Schultz in earlier interviews, the company could also explore commercial partnerships to bring the business forward.

“We’re in the nascent stage of these kinds of commercial relationships that are going to elevate the experience of a brick-and-mortar retail company.” He hinted that Starbucks could partner with another tech company, much like it has done with Tencent in China, which has resulted in 2 million social gift transactions in six months.

“Starbucks is probably best positioned, given our national footprint, the demography of our customers, and where we’re located to have those kinds of conversations,” Schultz noted. “I think it would be premature to kind of get into who they are, but clearly, we are a very viable partner, given the change in the industry.”

In the future, the experience of getting coffee at Starbucks may well be hassle free and faster than ever.