Friday, July 24, 2015

Maybe Howard Schultz IS Harlan Koch

I love it when I'm wrong.

Way back in 2009, I took Starbucks' Howard Schultz to task after hearing that Starbucks was going to cut back on the types of fresh coffee that it was offering to its customers. In my post, I talked about people who were passionate about their products - Harlan Sanders of Kentucky Fried Chicken (not KFC) fame, Jim Koch of Samuel Adams fame, and a younger Howard Schultz, who was so passionate about coffee that he actually left Starbucks for a while and started Il Giornale. Since 2009, I have used the character "Harlan Koch" to emphasize someone who is really, really passionate about a product.

But you don't just have to be passionate about the product. You can be passionate about other parts of the experience.

Take one company head who recently made the following comments:

Two years ago I reported on the seismic shift in consumer behavior that would significantly impact traditional bricks-and-mortar retailers. I was not clairvoyant. Since then, many traditional retailers have responded simply by substantially increasing their digital advertising budgets — significantly driving up their customer acquisition costs and producing little to show for it. We, on the other hand, took a very different approach.

What did this company head do?

By further enhancing our already world-class digital technologies through the introduction of capabilities like Mobile Order & Pay — and soon to be delivery — and expanding our loyalty program, we are driving traffic as reflected in the 4 percent growth in traffic seen in Q3.

Basically, the company leader was passionate about the way that he was doing things, and everyone else be damned. His company wasn't going to offer deals on Snapchat just because Snapchat was cool. His company was going to do things that actually got his product to his customers, and he saw results from this.

You've probably guessed who the company head is, but if you haven't, these financial results from PYMNTS should clarify things.

Starbucks CEO Howard Schultz has always said that Starbucks is an “undisputed leader in mobile commerce.”

And he uses the mobile stats that he presents each quarter as fodder to support his claim. And the company’s third-quarter earnings call yesterday (July 23) was no exception.

Schultz shared that Starbucks’ mobile transactions now account for 20 percent of all in-store sales — more than 9 million mobile transactions a week — and a 4 percent increase in foot traffic.

“Our mobile commerce platform is literally stronger than ever,” Schultz said, noting that the 20 percent figure was more than double the mobile transaction sales figures seen just two years ago.

You already know about my anecdotal experience. Since my first trial use of Mobile Order & Pay, I've used the service several additional times, with success. Frankly, it's convenient; punch in the order before I start the car, then pick it up a few minutes later.

And many people obviously agree with me.

So Howard Schultz appears to be reclaiming his Harlan Koch credentials. He's already passionate about what he drinks; now he just needs the white suit.
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