1. Beth Wernet Pam Jue Meghana Khandekar Shelly Ni
2. Q : What brought you to Starbucks,
the first time you ever went?
3. "Weekend morning Starbucks runs with
my dad are one of our most important
father-daughter traditions."
- Kylie, 15 year Starbucks customer
A : Friends or family
4. "Weekend morning Starbucks runs with
my dad are one of our most important
father-daughter traditions."
- Kylie, 15 year Starbucks customer
5. Who goes when?
Super regulars
16-20 x mo. 4% 20%
customers revenue
17% 37%
Regulars
8-12 x mo.
customers revenue
Occasionals
1-4 x month
79% 43%
customers revenue
6. What's interesting here?
Super regulars
16-20 x mo. 4% 20%
customers revenue
17% 37%
Regulars
8-12 x mo.
customers revenue
Occasionals
1-4 x month
79% 43%
customers revenue
7. Coffee Trends
"Individuals who start their day in a friendly coffee
circle will never have a totally bad day... [As Starbucks
changes] the flavor of its stores, it's belittling the very
role that it created for itself, and for its customer. It isn't
easy for all of us who used to love our cozy
neighborhood Starbucks."
- Ray Oldenburg, writer behind 3rd place idea.
12. Strategy
Bring a friend to Starbucks for 10% discounts on both your drinks.
Bring more friends, and everybody enjoys a larger discount, up to 50% off.
13. How it works
Introducing: Starbucks Coffee Breaks
14. How it works
Increased functionality to be built into Starbuck's existing mobile app
Starbucks Mobile
100 million mobile payment transactions since
program launch in January 2011
Increased
functionality to
2 million mobile payment transactions/week add & manage
contacts
$3 billion loaded onto Starbucks Loyalty Cards
(mobile & physical) accounting for
25% of all store transactions
(Nov 2012)
Starbucks
Coffee Breaks
October 2012 launching mobile payment
partnership with Square, increasing payment
capabilities
15. How it works main app flow
1 2 3
Select nearby Select meeting Message multiple
friends place friends at once
16. How it works main app flow
Via Square GPS,
grouping and
discount earned
display
automatically
4
Friends receive
invitations and can
accept or decline
6
Meet in store for a Coffee Break!
The more people you can recruit, the
bigger discount you will receive
5
Optional: Originator of the Coffee 1 Friend = 10% off 1 drink
Break can allow invitees to add 2 Friends = 15% off
additional friends to the group ...
10+ Friends = 50% off
17. How it works app flow - saved groups
Friends can be saved Message all group
and organized into members to organize
more permanent meet ups in advance, or
grouping anyone who's nearby for
an impromptu coffee
break
18. How it works app flow - group & store stats
Group Stats Store Stats
19. Estimated Revenue
0 - 12 MONTHS (US)
$177M - 422M
5 - 10% increase in annual US customer traffic
(225,000 - 450,000 more visits / year)
20. Estimated Revenue
0 - 12 MONTHS (US) 12 - 36 MONTHS (GLOBAL)
$177M - 422M
$450M - $3B
5 - 10% increase in
annual US customer
traffic (225,000 - 5 - 30% increase in annual global
450,000 more visits / customer traffic (400,000 - 2.4M more
year) visits / year)
21. Estimated Revenue
Facts from Annual Report:
60 million / week
$13.3B / year revenue
75% of revenue comes drinks bought in store
10,000 US stores
17,000 international stores
Calculated numbers:
450 unique customers / store / day
$4.93 - average spent / store / customer / day
$3.70 - average spent on drinks / store / customer / day
22. Model
Increase discounts by 5% per additional customer, up to 50%
Only discount $3.70 spent on drinks
Calculate average revenue gained from 1 - 30% additional
customers buying discounted drinks
Calculate average revenue lost in discounts from 1 - 20% (portion
of Starbucks customers who are super regulars and regulars)
Estimated revenue = revenue gained - revenue lost
23. Coffee Market in US
Americans spend $40 bil on coffee
8 mil Starbucks
35 mil
premium
36 mil
low
79 million buy coffee 62 million take
away from home coffee breaks
24. Launching the Program
MARCH/APRIL 2013 MAY 2013
1-2 months before app launch
● Introduce the concept with in-store promotion:
Wednesday afternoons, bring in friends for discounts on coffee
● In initial phase, groups will simply tell barista that they
are together
25. Launching the Program
MARCH/APRIL 2013 MAY 2013
● Launch Coffee Breaks across all US stores with update to
existing mobile app
● Square GPS integration makes allows baristas to seamlessly
access groups
● Encourage higher adoption by allowing app users to invite
friends via Facebook or Email
26. Risks & Costs
Risks Costs
● Customers don't use it $1.03 million in US
● A competitor will launch
something similar
● App Design/Development
● Print and Online Advertising
● Training Baristas
27. Starbucks Strengths
Large & loyal Mobile Payment Locations "Third Space"
customer base leader
5 Million active Square Partnership 17,600 locations Free WiFi
Starbucks card 2 mill mobile worldwide
members transactions per week 10,700 in US Starbucks
Evenings
28. Future MeetUp/Eventbrite
Meetup and Eventbrite encourage face to face
interaction but many organizers face the issue of
finding a physical space for their events.
A partnership with Starbucks will:
● give Meetup and Eventbrite organizers more
options for space
● promotion for Meetup and Eventbrite
● increase traffic and regulars for Starbucks
29. Future Online Education
Coursera, Udacity and edX are the leaders of the
massive open online courses (online course aimed at
large-scale participation and open access via the
web)
By pursuing a partnership and with various online universities, Starbucks
can be the sponsored and official meeting place or "campus" for students
globally to convene to study.
A partnership with Starbucks will:
● increase traffic & regulars
● reinforce goal of facilitating community &
customer engagement
● support educational initiatives & help online
universities keep student retention high
30. Future Global Profits
Model:
Total # of groups globally within online education, MeetUp &
Eventbrite
Assume 25% of groups use social groups discount
Approximately 10 people per group, meet 2 times per month
Spend $30.90 per visit
Online Education: $590 mil
Eventbrite/Meetup: $215 mil
Total: $805 million first year
31. "if you decide to join [a group], you
can cut your risk of dying over the
next year in half."
- Robert Putnam, Bowling Alone
32. "Coffee is a gift to mankind, coffee
unites, coffee entertains, and
coffee educates."
