Starbucks: gamifying the coffee buying experience
Part 2 — An example of Gamification
It’s a Monday morning, you’re on your way to work, just before you report to your workplace, you quickly hop into the closest coffee shop to get your fix of caffeine. Chances are that this coffee shop, is none other than one of the worlds most popular chain i.e. Starbucks. This chain has its presence in around 80 countries now and always have something new up their creative sleeve. Now how would a simple coffee shop chain elevate a coffee buying experience and make it fun and engaging?
The answer is digital engagement through good user experience and adoption of gamification. Starbucks has mastered in app engagement through features like online ordering and paying ahead of time to creating one’s own music playlist through Spotify, viewing reward balance, managing membership cards and so on. The Starbucks app provides a user experience that is both inviting, innovative, and refreshing much like their coffee itself.
The Concept — My Rewards Programme
The Starbucks app and My Rewards programme are at the center of the company’s digital ecosystem, bringing together loyalty, mobile payment, and content partnership, rolled into a user friendly, seamless, and engaging application. Marketing studies have it, that this move has substantially boosted sales and driven digital traffic onto their platforms.
The brand leveraged the concept of gamification to enhance the Starbuck’s experience and in turn drive sales as well. Customers register for My Reward through an application. Each time a customer interacted with the app or made a purchase she/he would gain some “stars” — representative of points in the Starbucks ecosystem. The game has “levels” depending on the degree of customers loyalty. More frequent visits to a Starbucks store is awarded through an upgraded level. Some of the of benefits include: an extra cup of coffee, a birthday gift or even offers customized especially for the customer.
How would ‘Gamification’ help Starbucks?
Incentivize Purchases
Starbucks through data and business intelligence is a pioneer at predicting what a customer might order and would leverage this knowledge to incentivize purchases made through their platforms. For instance, if a customer typically purchases an espresso, they may create an offer for this customer that rewards her/him with more stars if she/he buys an espresso with a breakfast item through the course of the week. The goal is to get a customer out of the regular ordering items and so try new things and, just maybe, find some new favorites. The “try them all” approach encourages members to cross items off their must-try list like a video game style achievement list.
Personalized Recommendations
Since the app already has data on a customers past purchases, likes and dislikes — the app can recommend a curated and personalized list of drinks, food items and/or a combination of the two that would suit a customers taste buds. The app would also have data on the typical amount a customer spends during a visit, the type of offers the customer prefers and would ensure that similar offers are presented to a customer to drive sales.
Encourage Purchases and Returning Visits
Starbucks crafted “Starbucks Dash,” which rewards members for coming in multiple times over a certain timeframe. Dash incentivizes customers to start a predictable visit routine, awarding them more Stars the more times they visit. The mobile app keeps track of how often a customer has visited, encouraging them to move the video game style progress bar towards earning their special reward. This in turn gamifies their visits and encourages them to visit until they unlock their reward.
Make up for times when business is not moving
Coffee drinkers would usually grab their cuppa on their way to work on a weekday morning. That is exactly when a coffee outlet would witness maximum footfall. Weekday afternoons and weekend mornings are usually slow business hours for them. To make up for this time, they reward afternoon purchases on week days and early morning purchases on weekends with more stars so that they’re bringing in revenue all day long.
Promote Merchandise and Partner Offers
Starbucks primarily sells coffee and some snack items, but they also offer merchandise like mugs, ground coffee, coffee beans etc. Sales of these items have high margins, which means that Starbucks garners profit through promoting them. Starbucks will offer bonus stars to members who add these items onto their normal coffee purchases in-store. It is very much like unlocking a level in a game because by just grabbing one or two items from a Starbucks retail display members can score a free coffee/snack/drink or some rewards. They can also promote partner offers through their application which would reward customers with some points or rewards.
Who won the game though?
If you guessed — the customers, then I am afraid to tell you that you’re absolutely wrong. The only winner here was Starbucks. A Harvard research quotes that — “The Starbucks Reward Loyalty Program has a staggering 16 million active members (as of March 2019), with 11% growth of their user base in Q2 2018. Starbucks attributes 40% of its total sales to the Rewards Program and has seen same store sales rise by 7%.”
Starbucks, hence, is a clear winner in this case. They have reinvented their relationship with customers and captured enormous value through their investment into digital technologies.
If you liked this article and would like to learn more about gamification — please read my first article on the basics of Gamification. If you would like to learn more about Design Thinking or Storytelling please feel free to read them as well.
