In my presentation I talked about how Starbucks is currently using technology that allows for mobile payments, mobile ordering, and promotions. These initiatives have been extremely successful. In September of 2016, mobile ordering accounted for 7% of transactions (which has since increased to 8%) and mobile payments accounted for 19% of transactions in the United States. A large part of this success is due to this technological innovation.
However, Starbucks is not stopping here. They are planning on taking mobile ordering and personalized promotions one step further.
Starbucks is planning on rolling out My Starbucks Barista. This is an AI based system that allows one to voice order through their smart phone. The primary target of this is consumers that are abroad so they do not have to worry about different apps or currencies. However, the convenience of this tool will make it marketable to everyone.
As I mentioned in my presentation, Starbucks uses all of the data they collect to make personalized promotions for each consumer. However, these recommendations are not made using a specific algorithm. Instead, they are using AI to generate recommendations based on every customer’s unique, individual behavior and expected behavior.
Starbucks is using AI to develop a system that will be even more convenient than mobile payment. This system will give the customer a recommendation on their wearable device as they walk in the door. The customer won’t have to open the Starbucks app or event take out their phone. Starbucks is, once again, using convenience to appeal to their customers.
They are also hoping that they can take this technology to the drive thru. As soon as a customer drives up, the drive thru syncs with the customer’s phone or watch and then brings up a personalized recommendation.
Starbucks is revolutionizing the coffee shop industry with their technological advancements. However, as we have talked about in class, there are always risks with using personal data. Many customers may be reluctant to adopt this technology. It’s only saving them a couple seconds but it involves syncing several devices and gives Starbucks access to large amounts of personal data. I am sure Starbucks will put more thought into the issue as this technology is closer to roll out but they have already stated that they will use this information “with respect and with permission” from the customer.
It is also important to recognize that Starbucks is first and foremost a coffee shop and therefore, are still looking for new flavors and food to add to their menu. They are just using technology to create a competitive advantage over Dunkin’ Donuts and McDonalds.