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

March 26th, 2013

Part of the explanation may be in the anti-fraud packaging. The very nature of a mobile app is to be easily usable in-aisle or anywhere the shopper happens to be. The design of this grocery CRM program is to make it difficult to work—messy to work with—outside of the kitchen table at home. Today, at-home still typically suggests a more comfortable desktop access.

The alternative to the messy packaging approach would be to perhaps scan register receipts or to—heaven forbid—try and share data across competing retailers. Plus, it pushes shoppers to enter as much CRM-friendly data at the site as possible. (I am going to try and resist suggesting that Starbucks’ use of adhesive is making its site stickier, but I may fail.)

Another interesting aspect of this program is that this isn’t really coming from Starbucks the retailer as much as it is coming from Starbucks the manufacturer. Although there certainly exist other manufacturers who are also retailers—Apple Stores (NASDAQ:APPL), Niketown (NYSE:NKE), M&Ms World, Disney Stores (NYSE:DIS), etc.)—they are overwhelmingly manufacturers first and dabbling in retail. Starbucks is that rare example of a retailer who is dabbling in being a manufacturer (specifically one whose products are sold in stores it does not control, as opposed to Costco [NASDAQ:COST] and Walmart [NYSE:WMT] selling their own re-branded products in their own stores).

As a manufacturer, Starbucks faces the same challenge as most manufacturers: figuring out exactly where its products end up. (JCPenney [NYSE:JCP] came up with the one of the more compelling tactics to track where its products end up being gifted.)

And with Starbucks, the goal is not solely to sell more products in grocery stores and warehouse clubs. It’s to lure those shoppers into Starbucks stores, where the profit margins can be a lot higher and the revenue potential much brighter.

The sticky sticker approach has the added benefit that it requires zero cooperation from the retailer distributors, who might see themselves as quasi-competitors, especially if they perceive Starbucks as trying to compete with them in selling Starbucks products.


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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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