Starbucks CEO Howard Schultz On Connecting With Customers Everyday, All Day

Three years ago, on a business trip to South Korea, Starbucks CEO Howard Schultz was amazed to see how ingrained smartphones were becoming in everyday life; in Seoul, phones were not only being used for communications and browsing, they were creating close links between social media and mobile commerce. When Schultz returned to the U.S., he says, he felt he had glimpsed the future.

"We were very early on in realizing we had an asset with the Starbucks loyalty program and the Starbucks card. So we invested way ahead of the curve in integrating that program into the Starbucks smartphone platform."

But this year he went even farther, when Starbucks struck an alliance with Square that allowed store customers to make digital payments through their phones. He now sees these efforts as reflective of a larger revolution that has shaped his outlook for the Seattle-based chain.

"Any consumer brand today—whether Starbucks or a product like Tide—it is incumbent upon the company to create relevancy in all aspects of your customers’ lives," he says. "The price of admission is not good enough if your relevancy and market position is only where the product is sold. We said to ourselves that we have to be as relevant socially and digitally as we are when the customer is inside our four walls as when they’re outside—and we want to thread the equity of the brand and the Starbucks experience to multiple platforms—digital, social, mobile—that encompass all aspects of customers’ lives. This is a big thing we’ve learned for 2012, and I think companies that don’t understand it are going to left behind."

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  • Stammeijer

    I would be impressed if this CEO had addressed the mechanics he is using to avoid paying a fare share of tax on the earning in the UK rather than siphoning off profits to taxhavens.
    Smart business you might say but starbucks does rely on the countries social plan, road system and tax credits for it's low paid workers. All this financed by taxpayers who cannot evade their share of the burden.
    I think it is time for a review! Or, as they are fond of saying in the States 'wake-up and smell the coffee

  • Arlander

    Why doesn't Starbucks gather information from their customers smart phones, and non-smart phones.  Other companies have implemented this technology, why not Starbucks.

  • David Lee

    I had a similar experience when I was stationed in Korea in 2003-2005.  Many Asian countries lacked landlines and skipped ahead of us on mobile as their economies grew.  I was shocked to see folding phones with cameras in 2003.  As I left in 2005 kids were using their phones to pay for their bus fares much like I now use my phone to buy coffee each morning!

  • Aidan Yi

    I am sorry but South Korea lacked landlines in 90's or 00's? Their government and companies invested heavily on R&D of IT industry as they fore sought the mobile computing is the future of digital world. No Asian countries skipped ahead of US in mobile except S Korea. US is among few countries with 4g mobile data service as of now.