That double-shot latte provides more than just a jolt of caffeine. As the following T_HQ article reports, Starbucks mines its payment transaction data to make decisions on things such as marketing promotions and store location selection.
Starbucks serves millions of customers around the world every week. However, not many notice the data that the company gathers, the sophisticated analysis it performs, and the smart intelligence it creates and uses on a daily basis. According to data collected by students at Harvard Business School, Starbucks conducts 90 million transactions every week, at more than 25,000 stores worldwide. By 2021, it’s expected to have 37,000 stores.
The coffee shop’s mobile app has more than 17 million active users and its ‘mobile order and pay’ feature records more than 7 million transactions each month — in the US, this feature accounts for 27 percent of all transactions.
Starbucks Rewards, the company’s loyalty program has about 13 million active members, indicating strong engagement with patrons. The loyalty program and mobile app also make it much easier for Starbucks to collect data, test new ideas, and roll out targeted data-driven initiatives.
“With our 90 million transactions a week we know a lot about what people are buying, where they’re buying, how they’re buying, and if we combine this information with other data, like weather, promotions, inventory, insights into local events, we can actually deliver better-personalized service to other customers,” said Starbucks CTO Gerri Martin-Flickinger.
Many retailers are discovering the rich customer intelligence that can be derived from payment transactions. Typically those that have an integrated mobile app with marketing and loyalty features are ahead of the game. They can turn past consumer buying habits and patterns into future sales with offers that result in sticky customer relationships. Quick service and fast casual restaurants are among retail categories that can reap big rewards since they can target customers who spend the most and make frequent visits.
Overview Raymond Pucci, Director, Merchant Services at Mercator Advisory Group