What's Helping Starbucks India in Its Digital Transformation?

Starbucks Is Implementing an Agile and Interoperable IT Architecture for Improved CX
What's Helping Starbucks India in Its Digital Transformation?
Starbucks Coffeehouse

Founded in 1971, Starbucks is the world's largest coffeehouse chain, serving over 100 million customer occasions in 78 markets globally. Constantly expanding across the world, the coffeehouse giant invests in technology innovations that aim at transforming it from a beverage supplier to a data-driven enterprise.

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Starbucks' success story is a fine example of the U.S.' soft power. By promoting itself as a go-to coffeehouse for working professionals, Starbucks stores present themselves as immersive experience centers. In India, however, the company faces fierce competition from new-age coffee chains such as Blue Tokai and Third Wave Coffee Roasters and legacy players like Cafe Coffee Day, Coffee By Di Bella and Costa Coffee.

Nevertheless, the company is aggressively expanding its footprint across the country. A decade since it started its first store in Mumbai, Starbucks currently runs more than 300 stores. According to The Times of India, Starbucks India's revenue from operations grew by 76% in the financial year 2022.

To achieve its growth target for the next three to five years, an agile, digital and technology foundation is necessitated. "The proposed digital vision of Starbucks India is to have a 'digital first' approach to make every single day effortless and rewarding for our customers and partners," says Vipin Gupta, CTO, Starbucks.

Apart from generating revenue from in-store purchases, part of the company's growth strategy is to improve the personalized experience for customers and forge new tie-ups to create new revenue streams. "We aim to provide more convenience and better experience to customers through omnichannel commerce," Gupta says.

All of it has implications for technology and digital strategy. To achieve these milestones, the adoption of agile and interoperable IT architecture along with a scalable and robust technology infrastructure is crucial.

The technology strategy, says Gupta, is aligned with the business vision. "Every technology input is centered around human connection - one person, one drink, at a time. While the customer's experience is supreme, the partner experience is no less. Whatever technology is implemented at stores, it is ensured that it positively impacts partner's experience and does not increase their overhead," he says.

Starbucks' Three-Pillar Approach to Stay Ahead of Competition

Foundational Pillar: Fundamental to survival Transformational Pillar: Keeping up with competition and customer needs Exploratory Pillar: Leading the market
This involves upgrading core technology pillars such as point of sales (PoS), app, order management, network, security and data This includes leveraging advanced analytics in areas of customer, inventory and sales, advanced process automation in store ops, internal functions, such as finance and business development, mobile and contextual engagement of customers This includes exploring new-age technologies such as vision analytics, conversational commerce and IoT

"Apart from upgrading the PoS and app, adding the e-commerce layer and initiating the transition to cloud are revolutionary. As you move up, exploring emerging technologies is key," Gupta says. "We have tried to keep a fine balance in each of the three pillars to keep abreast of the competition and customer expectations," he says.

Two noteworthy initiatives undertaken by Starbucks India include the use of SD-WAN technology to provide a seamless Wi-Fi experience to all customers dining in store. The underlying infrastructure also enables Starbucks to understand customer behavior and offer personalized services. The recently launched Starbucks app enables customers to explore the brand end to end and offers many features including rewards redemption. "Security, data science, cloud, technology operating model and governance are at the core for achieving the digital vision," Gupta says.

Tech-Driven CX

Starbucks Loyalty Program, part of the PoS foundational pillar, is one of the most personalized CX programs. The loyalty profiles are maintained in real time, ensuring personalization. Online order and payment, skipping queues, upgrading the app, and high-speed Wi-Fi availability are part of the CX program.

Through data analytics, Starbucks India is able to maximize customer lifetime value and stay ahead of competition. "By leveraging data and insights, we are able to achieve the customer segmentation only to serve them better," Gupta says.

While there is a focus on building multiple layers of technology, information security is of paramount importance. Customer data is protected by encryption, and industry standard frameworks and practices are adhered to.

What Lies Ahead for Starbucks India

With the young population increasingly opting for coffee and a rapidly growing economy, India provides a promising market for expansion. The company is well on track to improve its baristas' make-and-serve experience through its digital and technology vision and approach.


About the Author

Smruti Gandhi

Smruti Gandhi

Executive Editor, ISMG

Gandhi has more than a decade of experience in community engagement and incubating industry events. She is extremely proactive in building engagements with communities including CEO, CFOs and CIOs. Prior to joining ISMG, she worked with Dun & Bradstreet and Great Place to Work.




Foundational Pillar: Fundamental to survival Transformational Pillar: Keeping up with competition and customer needs Exploratory Pillar: Leading the market
This involves upgrading core technology pillars such as point of sales (PoS), app, order management, network, security and data This includes leveraging advanced analytics in areas of customer, inventory and sales, advanced process automation in store ops, internal functions, such as finance and business development, mobile and contextual engagement of customers This includes exploring new-age technologies such as vision analytics, conversational commerce and IoT
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