Drink Up

Blog Post Number 6- Big Data Case Study

“Drink up”

Starbucks and data... lets get to the bottom of the cup on this one and determine who your favorite coffee shop brews up their tricks and where they get their data from. 

Where to place Starbucks locations

This explains why Starbucks stores are clustered near each other in most of the cities across the world. However, this seems contrary to common-sense expectation as it can negatively impact the profitability of these densely located stores. But, Starbucks is a clever market player in determining an optimal store location using data analytics. This leads you to find this coffee shop in some of the most prime and strategic locations all across the world. They are placed in high-traffic, high visibility locations near downtown, suburban retailers, work-spaces and university campuses.

Starbucks is using data for insights

•   Consumer demographics

•   Population density

•   Average income levels

•   Traffic patterns

•   Public transport hubs

Types of businesses in the location under consideration.

2. Deciding Starbucks menu offerings

If you love Starbucks and drink it all the time, you should know your beloved coffee shop has been taking notes of what you purchase. Not only does Atlas help it to bag an optimal store location but even assists in customizing menu offerings. Analyzing consumer data, Starbucks drafts its new line of products to supplement the habits captured from its own stores. Atlas also provided data to determine areas with the highest alcohol consumption. Starbucks smartly picked up its stores to serve alcohol as a part of a special menu called “Starbucks Evenings”. Launched in 2010 in Seattle, it has since been expanded to other stores in different cities.

In another example, this caffeine purveyor used Atlas to predict the arrival of heat waves in the city of Memphis and launched a local Frappucino promo to beat the heat. These data-driven menu enhancements enable Starbucks to reach out a large customer pool.

3. Starbucks loyalty program

Starbucks has one of the most sophisticated loyalty programs in the world making it a marketing success.

The program has over 10 million loyalty program members in the US and around 24,000 stores worldwide. There are a ton of takeaways of data from this loyalty program, a few examples are below.

How Starbucks uses this data?

•   Identifies you by linking ‘What’, ‘Where’ and ‘When’ of the products you buy.

•   Tracks down your product purchasing behavior.

•   Delivers targeted advertising and planned discounts directly to your mobile devices.

Using analytics and Business Intelligence (BI), Starbucks has successfully transformed 300 pages long reports into 11 KPIs for each store across the globe.

Starbucks is clearly a data driven company, and uses data to their advantage in order to learn the most about their customers. With piles of information about Starbucks customers they are never at a loss for knowing what people want. Even the Unicorn Frap a free publicity phenomenon essentially was created because they knew people would like it, it wasn't a guess. Pairing with the taste and color desire, they made it a limited time only drink in order to get people racing to a Starbucks, before they are gone forever. So whether its the Unicorn Frap or whatever Starbucks has up their sleeve next, they are data master mines and are never guessing but rather predicting and launching what they know will be successful. Starbucks will keep people coming into their locations day in and day out due to their high personalization of every experience they give to customers. It is clear that Starbucks brews every cup of coffee with strong data science and analytics beans.

https://www.linkedin.com/pulse/starbucks-roasting-data-brewing-analytics-nigrah-bamb