Starbucks to continue digital drive

22 January 2010

SEATTLE: Starbucks, the coffee house giant, will continue to expand its social media operations in an effort to deepen its relationship with its target audience.

Despite the challenges of the downturn, Starbucks posted profits of $242m in the last quarter, as revenues rose 4%, to $2.7 billion (€1.9bn; £1.7bn), largely as a result of improved same-store sales.

Howard Schultz, its ceo, said "the global economic crisis has profoundly shaken consumer confidence and retailers who want to stay relevant in the future will have no choice but to recognise and respond to this new reality."

"To continue and to accelerate our recent momentum we will have to continue to improve, continue to innovate, and continue to focus on strengthening our connection to our customers."

Social media has played a key role in achieving this aim, most recently via a tie-up with Project Red to help fight AIDS in Africa, which was promoted using Facebook, where Starbucks has 5.5 million "fans".

"This effort was the largest global campaign ever on the Facebook platform and further strengthens Starbucks unique connection with our customers," Schultz said.

"The company continues to be the most popular brand on Facebook, with sites now launched in 14 countries, and we are the biggest brand within our category on Twitter, adding more than 1,000 new followers each day."

Last year, the Altimeter Group, the consultancy, ranked Starbucks as one of the brands making the best use of these web properties, and Schultz they would be integral to its operations going forward.

"The importance of our social media expertise continues to grow, and we evolve the conversation with our core customers," he said.

"Starbucks continues to be recognised for the way we're engaging and we're seeing it pay off in ways we have not anticipated."

The company also unveiled an iPhone application late last year, which provides a range of nutritional information and a store finder, as well as allowing consumers to add money to their loyalty cards.

This tool has been downloaded more than 1.2 million times to date, and featured in the holiday advertising campaign for the Apple-made device.

More broadly, the Seattle-based firm has entered the retail space, such as with the launch of an ice cream brand produced in partnership with Unilever, and the introduction of Starbucks Via, an instant coffee.

It will add "premium" variants to this latter range this year, Schulz revealed, in order to strengthen its position in the "home and office single serve markets."

Data sourced from Financial Times/Seeking Alpha; additional content by Warc staff