Starbucks CorporationSBUX announced yesterday the appointment of Gerri Martin-Flickinger as its first ever chief technology officer, as the world's biggest coffee chain is fast expanding its digital retailing and marketing initiatives to drive business.
Flickinger, the former chief information officer at Adobe Systems Incorporated ADBE , takes charge from Nov 2. She will lead Starbucks' global technology and IT team. Flickinger will report to the chief operating officer (COO) Kevin Johnson and will also be a member of Starbucks' senior leadership team. Johnson was named president and COO in January this year.
Flickinger has "deep experience in cloud, big data analytics, mobile and security." She played a crucial role in transforming Adobe to a cloud-services company. She should be an ideal senior leader for Starbucks as the company steps up focus on technology and mobile applications to create more revenue streams.
Starbucks holds a leadership position in using digital, card, loyalty and mobile capabilities in a retail setting. It is crucial today for restaurants to maintain an online presence in order to communicate with diners, attract new customers and build loyalty among patrons. Many large restaurant companies, apart from Starbucks, have successful loyalty programs. Companies like Red Robin Gourmet Burgers Inc. RRGB and Panera Bread Company PNRA have structured their marketing efforts to reward frequent customers.
Starbucks' loyalty program - My Starbucks Rewards (MSR) - is gaining in popularity, so much so that more than one third of all U.S. and Canada transactions take place through Starbucks cards. MSR is one of the most important business drivers of Starbucks.
Moreover, Starbucks' mobile app is one of the most widely used mobile payment apps in the U.S. Nearly 20% of all U.S. Starbucks transactions take place through mobile, more than double the figure from just a couple of years ago. In Dec 2014, Starbucks launched the Mobile Order & Pay service which is now available in all U.S. company-operated outlets - more than 7,400 locations. This initiative allows customers to order before arriving at a Starbucks café and pick up the items at their selected Starbucks store, thereby saving time. The service has been well accepted and is expected to boost MSR membership and app usage while increasing transactions. The facility has also been rolled out this month in 150 stores across London - its first market outside the U.S. - and is expected to be introduced in Canada soon.
Another key upcoming digital initiative by Starbucks is a food and beverage delivery service. The company expects to introduce the service in collaboration with on-demand delivery service provider, Postmates, in Seattle and through its own employees in specific office buildings of New York City like the Empire State building before the year ends. Customers in Seattle can place orders through Starbucks' mobile app while those in New York can order online.
In order to expand its loyalty program, Starbucks formed strategic loyalty partnerships with Lyft, Spotify and The New York Times to allow loyalty program members to earn stars through purchases made with these third parties, thereby generating an additional revenue stream.
The company is also witnessing an increased usage of MSR in countries outside the U.S. like China, Korea and Canada.
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