Starbucks has been making noise about its artificial intelligence (AI) projects of late – and specifically how they can be applied into marketing and customer experience activities.

Speaking to analysts following the company’s Q4 2019 earnings release at the end of last month, Starbucks CEO Kevin Johnson noted how Deep Brew, an initiative focused on the coffee house’s AI investments, is taking shape.

“Deep Brew will increasingly power our personalisation engine, optimise store labour allocations, and drive inventory management in our stores,” said Johnson. “We plan to leverage Deep Brew in ways that free up our partners, so that they can spend more time connecting with customers.

“Deep Brew is a key differentiator for the future, as we continue our quest to build world class AI capabilities, to better support partners,” Johnson added.

A tangible example of where this technology is being used is through a new range of Mastrena super-automatic espresso machines. The machines are equipped with sensors so every shot of espresso is logged and analysed centrally to assess potential areas for tuning and maintenance. This Internet of Things (IoT) technology is combined with Deep Brew to give a prediction of which machines need maintenance when.

This is by no means Johnson’s only recent prognostication on the topic. Writing on LinkedIn a week before the earnings call, the Starbucks chief executive noted the importance of customer experience – and in particular to, adversely, promote a more human connection.

“Our pursuit is laser focused on the people it will serve, and on removing every possible barrier standing in the way of our partners, their coffee craft, and their ability to engage with customers,” Johnson wrote. “Becoming world class at AI will ensure Starbucks will continue to be world class at creating shared experiences that drive human connection.”

This makes for an interesting dynamic; using AI technologies in what is essentially a data play, but also to humanise the customer experience. It can frequently be the other way round, with the word ‘eception’ being coined for that very purpose.

Writing for this publication in July, Alex Igelsbock, CEO of analytics platform provider Adverity, warned of jumping in too quickly without a plan for these initiatives. “While there are several instances in which AI would be the perfect fit, it’s not always the necessary weapon of choice for your particular business requirements,” Igelsbock wrote.

Starbucks has clearly thought about this element, if other evidence can be seen. As far back as 2017, the company began its journey to create what would become Deep Brew. Jon Francis, SVP enterprise analytics and insights at Starbucks, spoke at Microsoft Build – Starbucks runs on Azure – in May to explain how ‘reinforced learning’ was utilised via scalable and flexible infrastructure.

The company is by no means afraid of other technological innovation if it means improved efficiency and customer experience. The same Build event saw information given on a blockchain initiative Starbucks was working on with Microsoft, while the company also employs ‘dark social’ – traffic with no referral information – to gain greater customer gen.

Chris Beer, senior trends analyst at digital analytics provider GlobalWebIndex, noted the rise of dark social in line with what Starbucks was doing. “Public platforms have, by and large, morphed into content consumption platforms, while peer-to-peer sharing has moved onto messaging services,” wrote Beer. “Consumers may present a certain version of themselves on public platforms, but what they say on dark social is likely to be closer to what they truly think and feel.

“This is something baked into messaging apps in particular,” Beer added. “When Starbucks talks about the value of ‘deeper conversations’ taking place on dark social, this is what they’re tapping into.

Categories: OAG News

Kirk Morgan

Kirk has enjoyed 14 years in the recovery audit industry starting with Loder Drew, PRG and CBIZ since the late 90’s and has been with OAG doing sales for almost 2 years. He has a history of successful sales to Fortune 100 clients including GE, Tyco, Glaxo Smith Kline, CBS, Sony and Qwest. Throughout the late 1980’s and into the 90’s, he worked his way up to National Sales Manager for MP Plastics, a manufacturer of plastic products for the Americas and Europe. Clients included all the mass merchants and grocery trade, but with the advent of cheap Asian imports, much of that industry disappeared in the US. He’s currently working on originating new business for OAG, improving the sales and marketing materials, presentations, brochures and other collateral and supporting the sales efforts of any OAG associate who needs backup. Kirk attended San Diego State on a partial scholarship and a full time job and earned a BS in business and a BA in Journalism, and then worked for SDSU in Europe for two years leading tours. He lives in Laguna Beach, CA with his wonderful wife Landi.