Starbucks Gets Operatic Extolling Its Elevated Customer Experience
Under new CEO Kevin Johnson, Starbucks is simply augmenting its approach under founder, former CEO and still-Chairman Howard Schultz: Try to be all things to all people, to the extent possible, as embodied in the experience of ordering and enjoying a cup of coffee.
In a rare experience at its annual meeting in Seattle this week, Starbucks produced a grand finale starring opera singers from La Scala for more than 3,000 shareholders, analysts and guests. Opera singers Jaeheui Kwon, a tenor, and Chiara Isotton, a soprano—along with pianist Jieun Jeong—traveled to the annual meeting from La Scala Academy, in Milan, Italy, one of the world’s premier performing arts schools. The performance, Schultz said, was chosen in “homage and deep respect to the Italian people … in anticipation of the opening of our roastery (in Milan).”
New Roasteries featuring Princi baked goods, such as the flagship that opened in Shanghai in December, are key to Starbucks growth. Three more are in the pipeline: one in New York, next to the Apple store in the Meatpacking District and near Google headquarters in Chelsea, will open in the 4th quarter of this year; Tokyo will be home to one next year; and Chicago will also get a Roastery in 2019, with four floors and an escalator that Schultz called “the sexiest thing you have ever seen.”
Action Plan
Among other upcoming changes, the company said that it will:
• expand its in-store Princi bakery line
• set new standards for global pay equity
• hire more young people and veterans
• extend its educational partnership with Arizona State University
• introduce a coffee-traceability supply chain pilot program to benefit coffee farmers
• launch a pilot program to connect more than 10,000 mentors with youths in the U.S.
In tandem, Starbucks is focusing on opportunities to drive growth:
• Expanding its mobile ordering app beyond its loyal customers and making it available to all
• Opening more than 5,000 stores in China by 2021
• Expanding activations around its Starbucks Reserve high-end brand
• Launching its first Princi location in the US, inside the pilot Roastery location in Seattle
• Opening dozens more Starbucks Reserve bar locations around the world. The company calls Reserve its “innovation lab for the future.”
“No retailer is better positioned to meet the changing needs of today’s consumer, as expectations of convenience and community redefine what it takes to be a successful and relevant brand,” Johnson stated in presiding over his first annual meeting, after Schultz moved on from the CEO job last year.
“The story of our growth over the past five years is grounded in key innovation investments we have been making for our future, and this continued focus will ensure we build upon our leadership position in this rapidly changing retail environment.”
Mobile Growth
Starbucks in January reported just a 2% rise in same store sales in the US and globally, flagging a need to be more strategic about growth opportunities. Mobile is key as it leverages its app to better target loyal and (and convert occasional to avid and loyal customers), especially as Starbucks adds more items like its hit Blonde Espresso Roast and cold brews.
In-store lead generation is one idea, requiring customers who use its in-store Wi-Fi to enter their e-mail addresses in the first store where they get connected, according to the Wall Street Journal. “Thereafter the company’s software would remember their device and connect automatically. That would give Starbucks new e-mail addresses for non-rewards members that Starbucks could target.”
China Opportunity
The loyalty and dedication of its employees in China is why the market “is the fastest-growing and most strategic international market for Starbucks,” Starbucks China CEO Belinda Wong said.
The company now has 3,200 stores across 139 cities in China and is serving 6.4 million customers a week, she said. Now there’s a goal of 5,000 stores by 2021.
“We are opening a new store every 15 hours,” she said.
The growth opportunity is rich. By 2022, 600 million people are expected to reach middle class status in China. And by 2030, China is expected to have the world’s largest economy.
Equal Pay
As ever committed to cause marketing, Starbucks executives were especially proud of their progress on equal pay, under which it has reached 100% equity for partners (its name for sales associates, baristas and all employees) of “all genders and races performing similar work across the United States,” the company said.
“Roughly 10 years ago we began serious work to ensure women and men—of all ethnicities and race—are compensated fairly at Starbucks,” said Lucy Helm, chief partner officer. “This accomplishment is the result of years of work and commitment.”
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This article first appeared in www.brandchannel.com
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