Blog

Lead story – How did Starbucks make a Vaccine Economy comeback?

MyPOV: I’ve watched Starbucks closely during pandemic times. How would a digital darling fare when their storefront traffic was utterly disrupted – especially in office/commute locations? Could Starbucks come back strong, or would they have to radically re-assess their real estate footprint? And do consumers really feel like hanging out on Starbucks sofas right now? 

Well, we’re starting to get some answers, as Stuart notes in Brewing up a post-COVID customer experience at Starbucks:

While Starbucks rode out the worst of the COVID crisis as a result of having a well-established, digitally-enabled off site operation in place, the firm’s just turned in record third quarter numbers that suggest customers have been waiting for the chance to get back on the in-store sofas.

As Stuart reports, Starbucks’ CEO Kevin Johnson credits this bounce back to “the great human re-connection.” A more cynical take might be “the re-opening of markets,” but either way, the numbers don’t lie.

However, I’d question whether a yearning for connection is what’s driving these numbers. I’d credit: 1. addictive caffiene, 2. Starbucks’ knack for making personalized concoctions consumers can’t get at other coffee shops, 3. Starbucks’ formidable integration of digital and in-store, including improved contactless pickup, rewards, etc. 4. Greater investment in drive-thru.

In fact, as per these Q3 numbers, drive-thru accounted for 47 percent of transactions for Starbucks. Mobile ordering for in-store pickup delivery or curbside totaled 26 percent. As Stuart notes, Johnson himself emphasized the effort to improve drive-thru speeds. Does the image of consumers waiting in drive-thru lines sound like “the great human re-connection” to you? Seems like the sofas aren’t the draw.

It sounds more like coffee-craving consumers pushing ahead with altered habits, likely still wary of social distance issues via Delta variant surges. Credit to Starbucks for surging ahead, but I’m not sure the reassuring human re-connection talk is an accurate narrative for this rebound.

Diginomica picks – my top stories on diginomica this week

• Walmart teams with Adobe to offer e-commerce tech for US SMBs – A bit more retail flavor, also from Stuart:  “According to the latest data from Adobe Digital Economy Index, BOPIS spend now accounts for 22% of total retail activity, up from seven percent back in 2018. That’s clearly been driven in part by COVID as consumers looked for a safe way to purchase and collect goods and services, but it’s a trend that’s only likely to continue to thrive in the Vaccine Economy, on the basis of convenience alone.”
• A neuroscience study that suggests we aren’t building digital content right – what Simon says – I’m wary of the science of content engagement, but if there’s anyone who can sort might work, it’s Barb.
• Can synthetic data bridge the AI training data gap? – Neil turns his probing eye to the hype around synthetic AI data.
• Hollywood giant Lionsgate manages COVID-19 disruption and return to the office with Envoy – Gary files an industry use case where return-to-office is non-negotiable – and problematic hybrid work questions remain.

Vendor analysis, diginomica style. Here’s my three top choices from our vendor coverage:

• Amazon punts move to Workday HCM – what’s the takeaway for customers? – Phil digs into some big project news. Yep, this story had analysts and assorted media types scrambling digging and speculating. Phil: “I suspect there are further chapters to come in this story, given that Amazon isn’t going to keep using PeopleSoft for ever.”
• Box Sign adds e-signature to content collaboration at no extra cost – A minor news story? Perhaps, but as Phil notes, it’s a deviation from the enterprise norm: “Offering the e-signature capability without charge is a different strategy than we’ve seen from other digital teamwork players. We spoke to Box CEO Aaron Levie on Friday and he explained that the motive is to increase Box’s penetration across the enterprise.”

More vendor picks, without the quotables:

• “The lights are all green” – ServiceNow CEO Bill McDermott puts foot to the floor for growth in the Vaccine Economy – Stuart
• From fuel margin analysis to workforce management to analyzing Twinkie sales – how Pilot Flying J plans to turn Infor Coleman AI loose on bottom-line projects – Jon
• “Everything I do is based on metrics” – how Call Center Sales Pro uses Zoho Analytics to drive sales and boost productivity – Jon

Jon’s grab bag – Gary has another intriguing use case: Working with data in motion at clothing brand Boden. His quote captures the business case for modernizing retail: “Even better, feedback loops of appropriate recommendations to consumers is also a very powerful use of such speeded-up data, and Boden can now also track the real-time status of inventory and suggest alternative products if something is out of stock.”

Neil puts himself in the mix for the tell-us-how-you-really-feel award with this scorching take: Want to democratize your analytics? Then stay away from Zero Trust security. I am awaiting hot responses from Zero Trust krishnas advocates. Neil has some competition from Stuart this week, however, via Monday Morning Moan – lessons to be learned for government digital services delivery again (and again and again and again and again and…). We get this choice/disconcerting quote:

Have we become brutalized into accepting failure as a key component of digital service delivery in government?

Huge bonus points for working in the under-used word “vainglorious”…

Best of the enterprise web

My top seven

• Amazon and Workday Part Ways on HCM – Frank Scavo dusts off his blogging chops to make sense of how this project went off track.
• Getting to No: 3 Things your Cloud Vendor Won’t Give You (And What to Ask for Instead) – UpperEdge’s Adam Mansfield back in his wheelhouse: getting those cloud vendor negotiations right: “Unfortunately, underutilization of products and features during your subscription term is a common issue in cloud arrangements.”
• Disasters strikes two SaaS vendors – I would have opted for a different/less sensational title – hardly a disaster. Still, a thoughtful lessons-learned on two recent SaaS software outages, from Xero and Sage.
• Holding Ourselves Accountable for Business Results – Lora Cecere continues her supply chain accountability scorchers: “The problem is that the movement to outside-in processes requires a step-change in traditional supply chain paradigms. The movement from an inside-out, functional orientation to outside-in is not linear. Instead, the path requires a redefinition of process, metrics, and capabilities.”
• The Revolution in Education and Work: Is it for Real? – Phil Fersht of HfS riffs on a video podcast with Ravi Kumar and Thomas Friedman.
• Three keys to building a more skilled postpandemic workforce – McKinsey with another meaty post on the skills gap: “A few companies approach skill building in a more integrated way—and are quietly gaining an edge on rivals.”
• Taco Bell Warns It Is Running Out of Several Key Ingredients – Clive Boulton passed this along last week and I left it out, but the theme of supply chain shortages continues. Yes, “We’re out of naked chicken chalupas!” brings a smile, but global logistics issues are no joke. I saw plenty of this during my event trip to Vegas, including airport restaurants lacking menu staples.

Whiffs

Question: where are we, from an evolutionary perspective, when police have to warn not to hammock on high-voltage electricity towers? And where are we when Steak-umm is the voice of reason when it comes to the perils of disinformation?

Speaking of the end times of the march of technical progress, how does Windows manage to get more intrusive/commercial/inferior with every release, since the peak of (unsupported) Windows 7?

When it comes to defying consumers, Amazon’s pretty good at it also:

I can picture it now: “Hey, why are we still supporting browsing… on browsers?” Hey, at least the geese know the drill:

Though I’d say the parrots get the gold start this week:

See you next time…

If you find an #ensw piece that qualifies for hits and misses – in a good or bad way – let me know in the comments as Clive (almost) always does. Most Enterprise hits and misses articles are selected from my curated @jonerpnewsfeed. ‘myPOV’ is borrowed with reluctant permission from the ubiquitous Ray Wang.