Digital Design Blog

How Digital Can Save Starbucks and Why “My Starbucks Idea” May Not

Starbucks, more than any other company, has given rise to the “experience economy.” But today the company, with its sagging stock price, is in a deep funk. With shares down around 40%, sales flat to declining and foot traffic falling off, many industry analysts question where Starbucks lost its way: Did it too quickly abandon the coffeehouse experience for Frappacinos? Did it build too many stores? Did it neglect the notion of a “third place” that fueled its initial rise?

While there is truth in all of that, I believe one of Starbucks’ biggest mistakes was in not passionately embracing digital as a way to communicate with their customers — or even carry on a conversation. Ironic, given that Starbucks’ magic was built on creating a physical place for conversation.

Last week the company took its first tentative digital steps towards engaging its customers with My Starbucks Idea. The site, built on an application from Salesforce.com’s AppExchange, asks customers to submit their “Starbucks Idea” and allows them to vote, discuss and see what happened to each user’s submission. It’s a virtual suggestion box, of sorts, that Dell (IdeaStorm) and Oracle (Mix) have put to good use previously.

While I commend Starbucks for taking a stab at social media, I’m surprised at the tentativeness of their effort. While hundreds of people have submitted ideas and comments – such as providing free WiFi, to creating a frequent customer punch card, to complaining about the amount of pesto on a sandwich – there seems to be very little actual conversation about the ideas. Most shockingly, is the sound of silence from Starbucks itself. There is no dialog on My Starbucks Idea (especially from “partner” moderators). It looks like Starbucks may be letting yet another digital opportunity slip away.

UPDATE: In recent days the amount of comments has skyrocketed on My Starbucks Idea, with some posts generating upwards of 400 responses and some heavy activity from partner moderators (albeit with a very hard to identify sbx in their user name). Clearly there is a groundswell of customer activity happening — now the question is what Starbucks will do to continue the conversation. Below are 5 ways for Starbucks to build on all of the excitement.

1. Create Real Community – Take inspiration from this Howard Schultz quote: My highest aim is to have the entire Starbucks experience provide human connection and personal enrichment in cherished moments, around the world, one cup at a time. Turn Starbucks.com into a highly personal and local experience that engages consumers with rich content (coffee recommendations, music recommendations from Hear.com, book recommendations, etc.); rich tools (calendar and organization tools ala MeetUp.com) and a set of distinctive, authentic, voices via “partner” generated blogs. Better yet, tailor recommendations based on user profiles and controls (e.g. “I like”, “I don’t like”)

2. Create Real Conversations – Build upon the My Starbucks Idea to have a real conversation with loyalists about what works at Starbucks and what doesn’t. Create community brand champions (ala my.barackobama.com) that allow people to organize local events, meet other enthusiasts, etc. Starbucks.com should provide the tools for people to connect with each other and the brand. Let consumers reserve space in stores for book readings or community meetings. A nice set of mapping tools and rich local information wouldn’t hurt either.

3. Target Coffee Connoisseurs – It’s no secret that Starbucks lost focus on the “coffeehouse” experience as it sought to grow and sell new and more diverse offerings. Offline, the company just purchased Clover which makes a gourmet $11,000 single-cup brewer. Online, there is no mention of this – nor is their any real info about coffee, tastings, blends, etc. Starbucks.com should be a wealth of coffee information that allows users to get recommendations on different blends and varieties. In many ways augmenting the somewhat limited knowledge of their baristas.

4. Encourage Global Participation – Few brands have ability to inspire their consumers like Starbucks. The company should leverage this by encouraging a series of “whole” initiatives (such as green, wellness, etc) and give consumers the tools to affect change in their local communities, in developing companies and more. It’s a powerful notion and one that is perfect for the brand. Imagine integrations with Kiva.org for microfinance loans in developing nations or Treehugger.com around conservation.

5. Buck the Fast Food Trend – Starbucks.com should not mimic McDonalds or Dunkin’ Donuts. It shouldn’t have big, gratuitous pictures of products (e.g. Honey Latte) or be about contests or offers or games. There is more substance in the brand and the need that it fulfills for many people – it’s time to take Starbuck’s original offline ethos into the digital world and use the lightweight Web 2.0 tool sets to engage consumers in a way that other fast-food franchises can’t. The iTunes and iPhone programs are a start (more on that in another post), but there is much more to be done. The time is now.