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Starbucks and Microsoft partner to give venue tech a boost

Starbucks has partnered up with Microsoft to deliver a more personal and seamless customer experience in its stores by implementing advanced technologies, ranging from cloud computing to blockchain. The company also launched service out to better service differently abled customers.

At the Microsoft Build 2019 conference, Microsoft CEO Satya Nadella recently demonstrated how Starbucks delivers its signature customer experience with new technologies.

To reduce disruptions to the experience and securely connect its devices in the cloud, Starbucks is partnering with Microsoft to deploy Azure Sphere, designed to secure the coming wave of connected internet of things (IoT) devices across its store equipment.

The IoT-enabled machines collect more than a dozen data points for every shot of espresso pulled, from the type of beans used to the coffee’s temperature and water quality, generating more than 5 megabytes of data in an eight-hour shift. Microsoft worked with Starbucks to develop an external device called a guardian module to connect the company’s various pieces of equipment to Azure Sphere in order to securely aggregate data and proactively identify problems with the machines.

The solution will also enable Starbucks to send new coffee recipes from the cloud directly to Azure Sphere-enabled machines, which it has previously done by manually delivering the recipes to stores via thumb drive multiple times a year.

“Think about the complexity — we have to get to 30,000 stores in nearly 80 markets to update those recipes,” said Jeff Wile, senior vice president of retail and core technology services for Starbucks Technology. “That recipe push is a huge part of the cost savings and the justification for doing this.”

He added that the goal with Azure Sphere is to shift from reactive maintenance to a predictive approach that heads off issues before they happen. In the long run, the company will leverage Azure Sphere for additional uses such as managing inventory and ordering supplies and will encourage suppliers of its devices to build the solution into future versions of their products.

The company is also developing a feature by Microsoft’s Azure Blockchain Service for its mobile app that shows customers information about where their packaged coffee comes from, where it was specifically grown, what Starbucks is doing to support farmers in those locations, where and when it was roasted, tasting notes, and more.

This can not only empower farmers with more information and visibility once the beans leave their farms, but also allows customers to see the impact their coffee purchase has on the real people they’re supporting.

“While high-quality, handcrafted beverages are so important, it’s the stories, the people, the connections, the humanity behind that coffee that inspires everything we do,” says Michelle Burns, Starbucks senior vice president of Global Coffee & Tea. “This kind of transparency offers customers the chance to see that the coffee they enjoy from us is the result of many people caring deeply.”

Starbucks previewed digital traceability for shareholders at its annual meeting in March. Eventually, customers will be able to use the Starbucks mobile app to trace the journey of their Starbucks packaged coffee.

Starbucks has been using reinforcement learning technology — a type of machine learning in which a system learns to make decisions in complex, unpredictable environments based upon external feedback — to provide a more personalised experience for customers who use the Starbucks mobile app. Customers are more likely to get suggestions for items they will enjoy.

Within the app, customers receive tailor-made order suggestions generated via a reinforcement learning platform that is built and hosted in Microsoft Azure. Through this technology and the work of Starbucks data scientists, 16 million active Starbucks Rewards members now receive recommendations from the app for food and drinks based on local store inventory, popular selections, weather, time of day, community preferences and previous orders.

“Just like their relationship with a barista, customers receive the same care and personalised recommendations when it comes from our digital platforms,” said Jon Francis, senior vice president, Starbucks analytics and market research.

“Starbucks is an experience. Everything we do in technology is centred around the customer connection in the store, the human connection, one person, one cup, one neighbourhood at a time,” said Gerri Martin-Flickinger, Starbucks executive vice president and chief technology officer.

Starbucks is looking to expand this technology to the drive-thru experience.

Martin-Flickinger said, “Using data for personalisation is vital to our mobile app, and now we are leveraging data to improve our drive-thru experience.”

Because the technology does not have the individual order histories for drive-thru customers that are available for mobile app customers, it will generate relevant drive-thru recommendations based on store transaction histories and more than 400 other store-level criteria.

Starbucks is currently testing this technology in its Tryer Center innovation hub in Seattle, with plans to roll it out soon. And according to Francis, reinforcement learning will continue to have an important role at Starbucks in many other applications going forward.

“We’re meeting our customers where they are — whether in-store, in their car or on the go through the app — using machine learning and artificial intelligence to understand and anticipate their personal preferences,” Martin-Flickinger said. “Machine learning also plays a role in how we think about store design, engage with our partners, optimise inventory and create barista schedules. This capability will eventually touch all facets of how we run our business.”

In addition to technology enhancement, Starbucks has opened its first Signing Store in Guangzhou, China, in a bid to offer more diverse and inclusive employment and career opportunities for the Deaf and hard of hearing community.

The store will serve as a welcoming hub for those passionate about improving accessibility and experiences for all and is located near the recognised Guangdong Disabled Association and Guangdong Deaf People Association.

“As a coffee leader deeply rooted in China, for China, Starbucks is committed to creating equal opportunities for everyone, as well as a unique third place experience that addresses a wide range of community needs. The new Signing Store is an example of how we are building inclusive environments and careers for our partners,” said Belinda Wong, chief executive officer of Starbucks China.

Starbucks currently employs over 100 employees with disabilities in China. Building on its efforts to nurture talent and create more opportunities for the Deaf workforce, Starbucks has partnered with the Guangdong Deaf People Association to offer professional skills training, including sign language courses and internship opportunities.

Sign language symbols are printed on umbrellas in front of the store, and there are indicators throughout the store. Deaf baristas will wear aprons with the word “Starbucks” embroidered in sign language.

The store is equipped with a customised ordering system. Customers and staff will be able to communicate using notepads and two-way digital displays. For customers new to sign language, there will be a dedicated area for customers to write down their orders on an electronic board and wireless vibrating pagers will notify customers when their orders are ready.

To create an inclusive environment and encourage customers to learn more about the deaf community, the store will also offer sign language lessons and coffee workshops in sign language.

Join us at Customer Experience 2019 as we discover the experience innovations of tomorrow, break down business silos, and learn about prioritising data security for the most important person in the room – the customer. Sign up now!

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