Home News Why Starbucks is more about digital and tech than coffee – News
News - February 9, 2021

Why Starbucks is more about digital and tech than coffee – News

Apple. Google. Amazon. Starbucks?

We taxonomise businesses. Ford is a car company. Exxon Mobil is an oil and gas company. And Microsoft is a technology company.

Starbucks is normally slotted into the food-and-beverage category, but I think it”s more of a tech company – if not like Google, then at least like Amazon.

Amazon started out as an online bookstore then branched into selling everything. Today, Amazon differentiates itself against other retailers with algorithms, cloud services, robots and drones — not to mention tablets, TV boxes and, soon, a 3D smartphone. Amazon doesn’t belong in the “retail store” category. It’s a technology company.

Likewise, Starbucks started out selling coffee (it initially sold Peet’s coffee, actually). But now Starbucks is essentially a technology company. Here’s why:

Wireless charging

Wireless charging has been stuck in the mud for years. Mainstream acceptance is always coming next year. But somehow, next year never arrives. A few high-end phones support wireless charging, but for the most part, it’s still a nonstarter.

Starbucks is going big and being very visible about wireless charging. It will stimulate demand and drive conversations about the support of standards.

That’s why it’s significant that Starbucks this week announced a plan to install 100,000 wireless chargers in more than 7,500 of its stores over the next three years. That’s more than 10 charging stations per store.

Never mind that the company is supporting only one of the competing standards and therefore most smartphones won’t be able to take advantage of its wireless charging service. In fact, Starbucks is supporting a standard that isn’t very popular among smartphone makers: the Power Matters Alliance standard. Smartphone makers tend to support the Wireless Power Consortium standard (better known as the Qi standard).

The important thing is that Starbucks is going big and being very visible about wireless charging. It will stimulate demand and drive conversations about the support of standards.

Indoor location beacons

Photo: mightykenny

At its recent Worldwide Developers Conference, Apple demonstrated a feature that displays the icons associated with stores or locations on the lock screen when you arrive at those locations — even if you’ve never downloaded the store’s app! Tapping on the icon takes you to the Apple App Store to download the app if you don’t have it, and launches it if you do.

Apple’s poster child for this feature was Starbucks. The feature uses Apple’s iBeacon system, the micro-location technology I’ve written about in this space in the past.

It seems obvious to me that Starbucks is likely to add iBeacons to all of its stores, making it possible for you to order a drink in advance and then auto-notify the barista when you walk in the door. Your drink will be ready by the time you make it to the register.

The Internet of Things

You hear a lot about the Internet of Things, which refers to devices and sensors that communicate with each other and with humans over the Internet.

While the Internet of Things is a somewhat distant promise for consumers, Starbucks is charging forward with it aggressively.

Many Starbucks stores in the US have super high-tech Clover coffee machines, which connect to the cloud to communicate the performance of the machines – and to track customer preferences. (The cloud-based service that organizes Clover data is called CloverNet.)

Starbucks is also working on smart refrigerators that track the expiration dates of milk and other items inside, smart thermometers, smart door locks and other devices in stores where data on their current states can be uploaded.

All of this data is accessible and crunchable from headquarters.

Mobile e-commerce

Starbucks is a giant in mobile e-commerce. The company’s mobile transactions exceeded £590 million worldwide in 2013, according to one estimate. The company has revealed that its mobile payment and loyalty app is used by 10 million people for an average of 5 million weekly transactions.

High-performance wireless data

Photo: nao.k

Starbucks is working to be a leader in Wi-Fi hotspot performance. After offering mediocre but vaguely sufficient AT&T Wi-Fi to US customers for years, Starbucks is bringing in Google to offer super high-speed access – probably faster Wi-Fi than the vast majority of its customers have access to anywhere.

Google claims that its offering is 10 times faster than the old AT&T Wi-Fi – and 100 times faster in Google Fiber cities. Google Wi-Fi is expected to be installed in every US Starbucks store by the end of the year.

There are also credible rumors that Google is working on a Starbucks app feature that will automatically log users in to the Starbucks Wi-Fi the second they walk into the store.

Unlike so many retail scenarios, where Wi-Fi is supplied grudgingly or not at all, Starbucks is trying to compete using much faster and easier Wi-Fi.

It’s not coffee that defines Starbucks or sets it apart. Every two-bit restaurant, fast food chain and gas station sells coffee.

The defining feature of Starbucks as a business is technology – that’s what makes Starbucks successful.

Starbucks is a technology company.

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