Starbucks Uses AI to Improve Customer Experience

The tech allows for a more customized experience, while also gathering key data features about consumers.

February 06, 2020

SEATTLE—After deploying artificial intelligence (AI)-equipped hardware and analytics in 1,900 stores in 2019, Starbucks is adding even more technology this year, reports Chain Store Age. The coffee giant installed AI-enabled Mastrena II espresso makers in those 1,900 locations and plans to add the equipment to 4,000 before year-end.

According to Rosalind Gates Brewer, COO, group president and director, Starbucks, the Mastrena II machines improve the customer experience by reducing the amount of time it takes to make and serve coffee and lets Starbucks offer a wider assortment of beverages. In addition, Brewer referenced Starbucks’ Deep Brew AI engine as enabling the retailer to better understand customer preferences.  

“We will see the most significant deliverable around how we will integrate AI into understanding how to deliver the best coffee experience and also reducing the amount of time it takes to deliver and then giving us a chance to provide a variety of coffee to our customers,” said Brewer. “There's also other innovation happening around Deep Brew. It will show up in various aspects of the business, but the equipment position is our strongest position right now.”

Starbucks’ loyalty program has seen a 16% year-over-year increase in active Starbucks Rewards members. “It's the strongest growth rate we've seen in three years,” said Brewer. “So, the work that we've done in our multi-tier redemption is also allowing us to grow our member base. We've got an increase of annual member growth of 2.7 million members. There's a lot of customer insights that comes out of the work that we do as we grow our member base…And it's making a difference.” 

In addition to the increase, Starbucks’ total mobile orders reached more than 15% of the sales mix, compared to 10% in the fourth quarter of the prior year. That percentage includes 9% of sales being mobile delivery and 6% being mobile order and pay transactions. 

“This is truly a ripple effect to a better customer experience, more brand loyalty and additional offerings for consumers down the road,” said Tom Caporaso, CEO of loyalty program provider Clarus Commerce. “Using technology like this can help brands find gaps in their customer service [and] traditional loyalty programs and even allow them to offer premium loyalty options based on the increased knowledge of what customers really want. More technology isn’t harmful; it’s the key to finally understanding your customers—just don't forget the human touch.”