Dive Brief:
- Starbucks announced a partnership with Tencent for social gifting on WeChat, China’s leading messaging app, according to a joint press release.
- In a separate company press release the coffee company outlined its five-year plan for global growth with plans to add 12,000 stores worldwide by 2021 and projecting 10% revenue growth along with an expansion of its mobile user experience.
- In a process Starbucks called “extending the digital flywheel,” it laid out a plan to use artificial intelligence for a conversational ordering system named “My Starbucks Barista” and will add increased personalized email reward offers.
Dive Insight:
Starbucks was an early adopter of mobile technology, with the brand's mobile loyalty and payments platform responsible for driving foot traffic and sales for the chain. As competition grows in the premium coffee space — a segment Starbucks helped build — and mobile loyalty and payments become more commonplace, the company needs to refresh its formula in order to drive further growth. While digital is just one part of Starbucks' plan for growth over the next few years, the company has smartly hit upon several of the key emerging opportunities with technology.
Starbucks is planning on expanding its global footprint to 37,000 stores and the digital and mobile user experience is a key element of its growth plans. The company press release said the company is expecting to add pairing recommendations during Mobile Order and Pay checkout by early next year to join the planned AI-driven conversational ordering system which will roll out in beta on iOS eventually adding more users and Android support in later releases.
The WeChat deal with Tencent is an indication of how Starbucks will tap the global mobile experience through social gifting and digital payment capabilities. The new tech will tap WeChat Pay and Allen Zhang, Senior Executive Vice President of Tencent, said in the release that the partnership will bring the Starbucks experience to hundreds of millions of WeChat users in China. Both capabilities are now available to users in the China market.
