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With Starbucks’ Grocery CRM Plan, It Had To Get Clever About Fraud

Written by Evan Schuman
March 26th, 2013

When Starbucks (NASDAQ:SBUX) announced Wednesday (March 20) it would spread its CRM program to grocery stores that sell its bagged coffee, it wasn’t merely an industry first. It was Starbucks’ attempt to track shopper activity beyond the limits of the chain’s stores, site and mobile app—as if CRM deployments aren’t already complex enough.

Given that its program would deliver expensive value in the form of free food and drink at its stores, the first priority of the rollout was to try and discourage fraud. And that involved some creative packaging and identification mechanisms. And a choice to exclude mobile from the launch.

The idea of the program—slated to start May 12 (“although some bags will show up before that time,” said Starbucks’ Linda Mills, the chain’s senior manager of global brand public relations)—is that shoppers will go into grocery stores and purchase select Starbucks bagged coffees. (Many Starbucks grocery products, including its Via instant coffee line and beverages, are excluded from the rollout’s launch, but Starbucks said some of those excluded products will be included sometime in the Fall.)

Those coffee bags will have stickers with unique product codes. Every bag will have a different code, to help with both tracking and fraud prevention. That way, one purchase can’t theoretically be counted repeatedly.

The customer is supposed to take that number and enter it into the Starbucks website. The points earned will be called Stars and can be redeemed for free merchandise at Starbucks’ stores.

But what is to prevent a shopper from jotting down the number—or taking a picture of it—while the unpurchased product is still in the aisle? That’s where the design kicks in. The sticker is adhered to the bag such that its removal is likely to puncture or otherwise mess up the bag. As for the number, it’s not visible until the label is completely unwrapped.

“It’s pretty difficult to take the sticker,” Mills said. “It’s a multi-folded sticker and you have to peel off the casing to get at the code.”

In other words, it’s a rather messy extraction process and one that is unlikely to be done in-aisle without attracting a lot of attention. Then again, how much of a hassle will it be for consumers to get at the number when the product is at their home?

If a shopper waits until the product is used up and it’s an empty bag, then I guess destroying the bag to remove the sticker isn’t such a horrible thing, but how many shoppers would wait? Or even remember to deal with the sticker when the coffee’s gone?

For the initial launch, Starbucks’ mobile app will not play a role, forcing shoppers to enter the data at the full website. Although the option for adding the mobile app still exists, Mills said her team didn’t see it as initially necessary, given that anyone can simply access the Starbucks site from their mobile device.

That’s true, of course, but it also undermines the all-in-one-place—the experience is completely controlled by the retailer—environment that is supposed to be the mobile app. That’s triply true for a retailer such as Starbucks, which has fought so hard to be a true retail mobile app leader.


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One Comment | Read With Starbucks’ Grocery CRM Plan, It Had To Get Clever About Fraud

  1. Bob LeMay Says:

    Gee, Starbucks should take a page from Cracker Jack and some cereal boxes–put the “prize” (code) INSIDE the bag! Either print it on the inside of the bag/box, or attach a sticker on the inside, or just insert a small card (perhaps inside a wrapper with a lame joke on it!) in the bag/box.

    Do you think Starbucks will pay me a consultant’s fee for this idea?

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