The coffee giant Starbucks is growing and expanding during covid-19 and lockdowns.
CEO Kevin Johnson told the Financial Times that Starbucks stores are remodeling, moving more into suburban neighborhoods, and further using their aritifical intelligence to learn more about consumer’s coffee habits.
Johnson also said that the lockdowns only paused but did not halt the company’s growth.
Johnson stated the shutdowns and restrictions imposed by politicians revealed to them that they relied too heavily on dine-in locations in city centers.
In response to this, Starbucks is now reallocating how they do business. Starbucks will be shuffling 1,050 stores in the U.S., while they open 2,150 new ones. These new ones will be more geared towards suburban drive-through spots and urban walk-ups.
Johnson, however, did note that they are not totally forsaking the old vision of being “the third place,” neither home nor work, where people can visit. He believes they will be in demand as well once the pandemic is over.
Mom And Pop Get Burned
According to research firm Euromonitor, the U.S. will lose about 2,000 smaller and independent coffee shops.
Smaller chains, the mom-and-pop coffee shops… don’t have the balance sheet that Starbucks has. There are going to be a lot fewer coffee shops. Starbucks stands to benefit.
R.J. Hottoway. Morningstar investment strategist.
Because investors are aware of this, Starbucks’ market capitalization shot up 80% since March, to an almost near-record $119 billion.
RBC noted that Starbucks could see double-digit earnings growth in 2022.
Deep Brew = Deep Pockets
One of the ways Starbucks is staying ahead of the action is with their artificial intelligence known as “Deep Brew.” This allows Starbucks to adapt stores to varying market conditions and to further personalize relations with its loyal customers.
An article on Starbuck’s website posted at the beginning of 2020, explains how they are using their proprietary AI to help them adapt.
According to that article, Kevin Johnson has had decades of software experience from working at places such as IBM, Microsoft, and Juniper Networks.
A few years ago, I was having dinner with my family at a restaurant and we looked at the table across from us, and there was a family of four sitting and having dinner together, and all four of them were looking down and engaged in their mobile devices, not talking to each other at all. They weren’t present in the moment and a light bulb kind of went off for me that day. After 32 years in tech, I was now in a business very much grounded around creating community in our stores that is grounded in human connection over coffee, which made me start to think about the world we live in today. A world that is supposedly more connected than ever, but in some ways, people seem to feel more isolated and lonely.
This age of unparalleled digital connection has brought with it an age of unprecedented human disconnection. While technology has done many wonderful things, it’s also changed behaviors in a way where people don’t interact with one another nearly as much, which is unhealthy and I think is contributing to a global epidemic of human loneliness. I believe we are just beginning to see and understand the implications. And I realize that serving 100 million customers a week at Starbucks means we have at least that many opportunities to enhance human connections and perhaps create that sense of community and a place where people feel more connected face-to-face with other people.
Kevin Johnson
He then claims to have had that “hold my coffee” moment, and continues to say,
Technology has done so much positive for the world, but it has contributed to some unhealthy outcomes as well. When it comes to enhancing human connection and enabling people to be present and feel a part of a community, I believe technology, if used in responsible and thoughtful ways, can also be the enabler of freeing up people to be more human and better serve humanity.
I want Starbucks to thrive, and I think technology used as a vehicle to get us there can be a great goal. Anything that allows us to be more productive in the stores without taking away from the Starbucks experience is always welcome. As a nation and a world we are losing face-to-face interaction, so we need to be very protective and mindful of our impact in that arena. I tell my partners every day that our customers can get coffee anywhere, but our challenge is to create a fantastic experience each and every time. I think our human connection is what sets us apart from the retail crowd.
Margo McCoy. Store manager from Georgia
The following is an except from the article:
AI For Humanity
When people hear about technology and automation in the workplace, too often they can either zone out or start worrying their jobs are at risk. Johnson’s challenge is to help people understand that in his vision, it’s actually the opposite – he doesn’t want to replace people with robots, he wants to help them find ways to lean into their humanity.
It’s a vision that Johnson, Gerri Martin-Flickinger, Starbucks chief technology officer, and others have recently been evangelizing to the larger company.
Martin-Flickinger, who studied artificial intelligence and machine learning in college, gave a lunchtime seminar in November to a standing-room-only crowd of Starbucks partners. Her goals, she said, were to demystify AI and machine learning, but also to make the topic more of a forethought for people at Starbucks headquarters, especially those outside her team.
“We want to inspire you to walk out of here today thinking about AI and going, ‘Wow, I wonder how this could apply to my world,’” Martin-Flickinger said. “Not because we want you to go off and start programming machine learning algorithms, necessarily, but to start thinking about how this can change and enhance what you do every day. It’s all around us already.”
Martin-Flickinger believes AI is applicable to virtually every aspect of the business – technology, finance, legal, supply chain, marketing or retail stores. Whether AI is being used to help partners in stores and in departments across the Starbucks headquarters do their jobs better, to improve and radically personalize the customer experience or to simplify company operations, her team’s north star and Johnson’s vision are one and the same.
“We are working on technology that helps amplify the human connection,” she said.
What, specifically, could that look like? With a technology initiative called Deep Brew, Starbucks is ideating and working on a broad suite of AI tools to help elevate every aspect of the business and the in-store and customer experience.
AI will eventually help automate many aspects of store life, not as a fleet of sandwich-toasting, latte-making robots, but more like an invisible, super-smart sidekick to the humans wearing the green aprons. AI can help do the heavy lifting on processes like inventory, supply chain logistics and replenishment orders, saving partners time and making sure nobody runs out of Nitro Cold Brew or Banana Nut Bread. AI can help managers predict staffing needs and make schedules. AI can help anticipate equipment maintenance well before an oven or a blender goes on the fritz.
The kind of automation Johnson and Martin-Flickinger envision will be invisible to customers, except they may notice that Starbucks partners have more time to spend with them.
Starbucks essentially is a company made up of 32,000 small businesses, each with its own ebb and flow and needs, Johnson said.
“Every store has its own personality. Every store has its own set of customers and its own set of characteristics, and AI can help us understand those individual store characteristics better,” he said. “If you try to run one algorithm for all stores, you’ll make progress. That’s kind of what we’re doing now. But to really break through, you have to get down to the individual store level, and making sure we’re making it as easy as possible for each store manager to create the culture and the kind of human connection we aspire for where they are, because when we are able to do that – wow, we are at our best.”
To help understand the unique needs of each store, Jon Francis, the company’s senior vice president of enterprise analytics, data science, research data and analytics, and his team have spent the past four years since he came to Starbucks analyzing the vast sea of data generated by the company and its customers.
“We talk a lot about tenacity on our team. We’re trying to build a culture around perseverance and grit, because there’s so much potential in this but it doesn’t come overnight,” Francis said. “We’re trying to operate world-class tech, but we’re not a tech company. We’re not asking our data scientists to just go push the envelope to the bleeding edge. It’s always going to be bigger than that. It’s always going to be about more than just convenience and, ‘How do we sell more product?’ It’s about using these digital tools to elevate the analog human experience.”
Behind the counter and behind the scenes, each little boost from AI will help save time – time partners can then spend on the most important parts of Starbucks: customers and coffee. He believes these moments, even the smallest ones like saying hello to someone in an elevator, exchanging pleasantries with a fellow commuter or chatting with your barista as they prepare your latte, can be an antidote to loneliness and have a positive effect on our mood.
For customers, AI can help provide a “radically personalized” and warm experience. Using AI in the Starbucks app or on the drive-thru menu will present customers with thoughtful, personalized choices based on their own preferences, but also on things like weather and time of day. With the explosive popularity of mobile ordering and delivery services, Starbucks is looking at how AI can help baristas make beverages in an order that takes the whole picture into account. For instance, if a store gets a digital order for four iced lattes but the customer is still 10 miles away, baristas might make other drinks first.
Starbucks and its technology partners are currently working to develop a number of AI tools, some of which – like the drive-thru menu personalization options – will start rolling out as early as this year. Other concepts are still being explored, often literally from the ground up at the Tryer Center at Starbucks headquarters.
Where All This Is Headed
Gerald Celente of the Trends Research Institute and creator of the weekly Trends Journal, gives his forecast on what this means for Starbucks and smaller shops and baristas:
TREND FORECAST: That a CEO of a major international firm would make such a bold statement that the company relied too heavily on dine-in locations in city centers illustrates the dystopian new ABnormal where once upon a time when people congregated socially, is now no longer acceptable.
We forecast that in a few years, when the COVID War ends, the old coffee shop, retail, restaurant, and entertainment models will return, and new models rushed into place will prove both costly and outdated.
AUTHOR COMMENTARY
If you have not figured it out yet, this “pandemic” and the asinine response by the governments of the world, have nothing to do with health and safety, but everything to do with crushing the little guy. The greatest wealth transfer the world has ever seen is taking place before our very own eyes – which is all by design.
When the governement created their absurd mandates of what is “essential” and “non-essential,” the little guys were pretty much all forced to close, and then slapped with so many restrictions and mandates on them, it is far too costly for these businesses to function. Starbucks has the seemingly endless money pool they can reach into and do whatever it is they want.
[10] When wisdom entereth into thine heart, and knowledge is pleasant unto thy soul; [11] Discretion shall preserve thee, understanding shall keep thee: [12] To deliver thee from the way of the evil man, from the man that speaketh froward things; [13] Who leave the paths of uprightness, to walk in the ways of darkness; [14] Who rejoice to do evil, and delight in the frowardness of the wicked; [15] Whose ways are crooked, and they froward in their paths: Proverbs 2:10-15
Folks, use your head and think (if you are not already doing so). These shutdowns are designed to squash small businesses while leaving big businesses left to dominate and control the markets. While mom and pop went broke, did you see Wal-Mart, Costco, McDonalds, Starbucks, etc, shutdown? No, you did not. The small guy and middle class was, and is, getting annihilated on an epic scale. More stimulus and loans are coming in 2021 and years to come, thereby the little guy will be more dependent on the government to survive and exist. What we are seeing is fascism, and yet the masses are blinded.
Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power.
Benito Mussolini
As for Starbucks’ AI technology, it further demonstrates where it is all heading. As the small guy gets burned, Starbucks will be able to then further expand its control of the broad masses. What they are doing is just laying the groundwork for even more technology controlling the broad masses’ lives and invading more of their personal lives.
I do NOT waste my money on Starbucks. That place affirms all kinds of things the Bible calls wickedness. It never ceases to amaze me the snaking lines of cars in their drive-throughs to get a cup of sugar and chemicals with a little coffee in there, and then pay outrageous prices – that will no doubt go up because of the dollar buying less and the cost of goods going up.
It should come as no surprise (to me at least) that the original founders of Starbucks, Gordon Bowker, Sev Siegl, Jerry Baldwin, all attended the University of San Francisco, a private Jesuit university. This once again confirms the prophecies laid out in the King James Bible that Mystery Babylon is indeed the Vatican and the Roman Catholic religion.
[3] For all nations have drunk of the wine of the wrath of her fornication, and the kings of the earth have committed fornication with her, and the merchants of the earth are waxed rich through the abundance of her delicacies. [11] And the merchants of the earth shall weep and mourn over her; for no man buyeth their merchandise any more: [12] The merchandise of gold, and silver, and precious stones, and of pearls, and fine linen, and purple, and silk, and scarlet, and all thyine wood, and all manner vessels of ivory, and all manner vessels of most precious wood, and of brass, and iron, and marble, [13] And cinnamon, and odours, and ointments, and frankincense, and wine, and oil, and fine flour, and wheat, and beasts, and sheep, and horses, and chariots, and slaves, and souls of men. [14] And the fruits that thy soul lusted after are departed from thee, and all things which were dainty and goodly are departed from thee, and thou shalt find them no more at all. [15]The merchants of these things, which were made rich by her, shall stand afar off for the fear of her torment, weeping and wailing, [16] And saying, Alas, alas, that great city, that was clothed in fine linen, and purple, and scarlet, and decked with gold, and precious stones, and pearls! Revelation 18:3, 11-16
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