Digitization of Starbucks

In July, Howard Schultz, CEO of Starbucks, hosted Jack Dorsey, founder of Square, a mobile payment app from Silicon Valley, at Starbucks headquarters in Seattle. Jack Dorsey is also the co-founder of Twitter, whose products focus on the field of mobile payments, including card swipers, payment apps and mobile payment solutions.

This is a meeting between the traditional catering industry and the emerging mobile Internet technology industry. The purpose of Jack Dorsey's trip is to work with Starbucks to bring Square, which came with smartphones, into Starbucks' 6800 stores in the United States, allowing the coffee company to complete payment transactions with lower fees and a more convenient process. Speaking of this big customer, Square's annual transaction volume is likely to soar from $6 billion to $10 billion, a great leap forward.

Howard Schultz and Jack Dorsey reached a cooperation agreement at the dinner table, taking into account the improvement of the business by technology and the convergence of values between the two sides.

Jack Dorsey took not only a contract, but also a big gift. Starbucks invested $25 million in Square for strategic cooperation, and Schultz himself will join Square's board of directors.

How will Square change the existing payment methods and accelerate the digital transformation of Starbucks?

Later, when users buy coffee at Starbucks, they can see this payment scene: when a user with a Square app on his phone enters a Starbucks store, the user's mobile phone can automatically remind the store of his entry through GPS technology. At this point, the user's name and photo will be displayed on the screen at the cashier. When checking out, users only need to tell the merchant their own name, and Starbucks' system will match the user's photo to complete the payment, without even pulling out the phone.

The function of this system is not only to make it easier to receive and pay, but also a customer relationship management system. Around the payment process, consumers will feel that the whole service is more user-friendly and friendly.

Starbucks began experimenting with mobile payments before the partnership, and it developed its own app last year. At first, Starbucks did not expect that mobile payments could develop so rapidly, and it was from its own business that Howard Schultz seriously considered how to seize the opportunity and quickly finalize the cooperation. Starbucks now processes more than 1 million mobile payments transactions a week, and has completed more than 60 million mobile payments transactions in a year and a half.

Digitization is not limited to digitizing payments. Online, Starbucks' promotion also makes use of a variety of social media and social networks to get closer to consumers. Although Schultz didn't open an Twitter account himself, Starbucks partnered with Twitte before it became popular. Starbucks has 2.85 million followers on Twitter, while it has 5.82 million followers and more than 30 million Like clicks on Facebook. Starbucks has also opened accounts on photo-sharing platform Instagram and photo-sharing site Pinterest, which are niche compared to Facebook and Twit-ter, but are also becoming a growing online community for Starbucks. Starbucks has updated 173photos on In-stagram and more than 600000 users have the hashtag "starbucks". Now Starbucks is using Wechat push again, at the forefront of the top 500 companies.

If you look at the digitization efforts of each piece alone, it may be regarded as a flash of inspiration. Behind this, however, in March this year, Starbucks set up a dedicated department and overall head of the organizational structure, AdamBrotman, the chief digital officer, to report directly to Chairman Howard. After being appointed as a former senior vice president of Starbucks Digital Venture Capital, the department managed all Starbucks digital projects, including web pages, mobile apps, social media, digital marketing, StarbucksCard and e-commerce, in-store Wi-Fi, and emerging in-store payment technologies.

The problems facing them will be very different from those faced by the retail, chain and catering industries in the past. They need to find talents related to the mobile Internet and social networks, to enter the digital media ecosystem, to deal with mobile application developers, and to learn more technologies, which requires Starbucks to completely change itself from mentality to action.