The benefits which MNCs (here-STARBUCKS )are getting from AI/ML -how enhancement of AI provided to their products which made them among the top notch companies.
The coffee giant is in many ways at the cutting edge of using big data and artificial intelligence to support guide promotions, sales and business decisions.
🎗Starbucks’ worldwide growth has been quick and strategic. As of June 2019, the company has more than 30,000 stores in 80 countries worldwide and is expected to sustain a strong momentum for expansion. It is also one of the region’s largest employers of technology……..
🎗Although its quality is unquestionable, its price has always been higher than those provided in different countries by domestic coffee houses.
During the economic slowdown of 2008, this was one of the reasons why the company took a hit as consumers looked for cheaper alternatives for their regular coffee. Starbucks was required to close down 600 stores that did not make money. By 30 March 2008, its profit had declined by 28% compared with the same time in 2007. It closed an additional 300 stores in 2009 and laid off 6,700 staff.
🎗After a period of eight years, Howard D. Schultz returned as CEO of Starbucks on January 8, 2008, replacing Jim Donald. Since 1982, when it only had four outlets, Schultz has nurtured the company. He served as CEO from 1987 to 2000 and presided over the public offering of the company in 1992.
-On the day he took office once again as CEO, Schultz fired off a letter to the workers. He said The company needs to shift its focus away from bureaucracy and back to customers.” He made his target very clear: “Re-establishing customer emotional attachment.”
-“My Starbucks Idea” was rolled out in March 2008 for clients to share ideas with each other and directly with the company. Customers were able to offer views on everything such as goods, services, layout, ads, corporate social responsibility, in-store music, and so on as part of this. Around 1.3 million people on social media posted more than 93,000 suggestions, and page views per month rose to 5.5 million.
-Starbucks had to restore its customer relationships after the 2007/08 recession and prove to the world that it cared about quality and continuity. It also had to give the altruistic aspect of the brand a leg up, such as community construction and environmental care. Customers had a direct connection with the headquarters via “My Starbucks Idea” and Starbucks was listening, of course. The ubiquity of Starbucks quickly became an opportunity as customers from around the world had the chance to interact with each other, building like-minded communities such as ’free Wi-Fi group’, ‘soy group’, ‘comfy chair group’ or ‘frappuccino lovers’.🙃🤞
About 100 proposals were implemented by Starbucks. The coffee retailer has developed a robust fan base through this initiative. It was able to reignite brand confidence by offering consumers a voice to share their thoughts and opinions on the brand and by reacting to it.
🎗In 2016, Starbucks announced a strategic plan for using AI and big data, and by expanding its loyalty program and personalization to communicate more deeply with its customers, the company has made good on its commitments to investors.
-Starbucks customers alone loaded more than $1.2 billion into their Starbucks app in the first quarter of 2016, which is more cash than some banks!
-Starbucks chose casual and informal chats with customers to capture overall mood and understand experience. It has successfully used research findings to shape its market entry strategies in many countries.
-Starbucks has been using ‘reinforcement learning technology, a form of machine learning’ in which a system learns to make decisions based on external feedback in dynamic, unpredictable environments, to provide customers using the Starbucks mobile app with a more personalized experience.
“It is not a single algorithm that’s used across the entire population, it’s actually a data driven AI algorithm based on your own preferences, your own behavior, as well as behaviors we’re trying to drive.”
Starbucks CTO, Gerri Martin-Flickinger .
-In order to deliver customized marketing messages to clients, the organization uses predictive analytics to process this information, including suggestions when approaching their local stores, and incentives aimed at increasing their average spending.
-An AI driven virtual barista service on the app also allows customers to position orders via voice command directly from their phone.
-To know more about you and increase sales in the process, they use software and predictive analytics. Starbucks’ data scientists know what coffee you’re drinking, where you’re getting it, and at what time of day.
-Starbucks segments its customers with data and machine learning, then defines rules based on decision trees that map their purchasing actions.
- Starbucks uses its data from 90 million transactions every week to make business decisions such as where to open new locations, and what items they can sell, in addition to offering a more personalized customer experience.
- Thus, we may assume that AI is responsible for the remarkable growth of Starbucks’ sector.