Inside Starbucks’ ambitious plan to combat the ‘seismic shift’ that could kill its business
‘We look at digital not as a marketing channel, but as a foundational part of the customer experience at Starbucks,’ says its Global Chief Strategy Officer
The slow and steady decline of retail that’s shuttering department stores and putting malls out of business is also taking a toll on Starbucks.
“We can’t hide behind the fact that there is a seismic change that we’re experiencing as a brick-and mortar retailer,” Starbucks CEO Howard Schultz said at the company’s Investor Day on Wednesday.
As customers increasingly shop online instead of in person, Starbucks can no longer rely on foot traffic as a way to get people in the door, Schultz said. The U.S. currently has too many stores and not enough people willing to shop in them, which Schultz predicts will result in lots of companies closing stores.
Despite the challenging retail climate, however, Starbucks plans to open 12,000 new stores around the world in the next five years, with projections of 10% revenue growth.
Schultz said that, in order to make this growth a reality, the company is banking on two strategies: becoming a “destination” and investing in digital.
“We believe we not only have the antidote to the seismic change in consumer behaviour, but we have an opportunity to really transform not only the core business to create a new source of growth and revenue,” Schultz said.