Page 28 - Introduction to Electronic Commerce and Social Commerce

Opening Case: How Starbucks Is Changing to a Digital and Social Enterprise 5

special deals. The millions of people who “like” Starbucks on to Google Wi-Fi, instead of AT&T, to give their customers
Facebook verify that the company has one of the most popular faster Wi-Fi and network speeds.
fan pages (see current statistics at fanpagelist.com and at
facebook.com/Starbucks). Starbucks offers one of the best Early Adoption of Foursquare: A Failure
online marketing communication experiences on Facebook to
date as well as mobile commerce engagements. Starbucks Not all Starbucks social media projects were successes. For
posts diversified information on its Facebook page, whether it example, the company decided to be an early adopter of geo-
is content, questions, or updates. The company also advertises location by working with Foursquare (Chapter 7). The initia-
on its Facebook page (e.g., contests, events, new products). tive simply did not work, and the project ended in mid-2010.
The company experimented in the UK with a similar location
Starbucks’ Presence on LinkedIn and Google+ company called Placecast. As of fall 2011, Starbucks had a
better understanding of the oppor tunities and the limitations,
Starbucks has a profile on LinkedIn site with over 667,000 fol- so it may decide to try geolocation again with Facebook
lowers (March 2016). It provides business data about the com- Places, or it may revive the Foursquare project.
pany, lists new hires in managerial positions, and advertises
available jobs. Starbucks is also active on Google+. It provides
business data about the company, shows employee profiles, The Results
and advertises available jobs. Note that Starbucks is regularly
assessing the cost–benefit of advertising on social networks. Starbucks turned sales around by effectively integrating the
digital and the physical worlds. In 2010, its operating income
Starbucks’ Activities on Twitter almost tripled ($1.437 billion versus $560 million in 2009)
and so did its stock price. In 2011, the operating income
In March 2016, Starbucks had over 11 million followers reached $1.7 billion. Since then, the operating income is
(Follow@starbucks) on Twitter (twitter.com/starbucks). increasing rapidly. Sales are lifting due to digital and social
Whenever the company has some new update or marketing media promotions.
campaign, the company posts a tweet (e.g., discounted The company’s social media initiatives are widely recog-
drinks). By October 2013, Starbucks was the number one nized. In 2012, it was listed by Fortune Magazine as one of the
retailer to follow on Twitter. In November 2013, Starbucks top social media stars (per archive.fortune.com/galler-
gave away a $5 gift certificate to 100,000s of their customers ies/2012/fortune/1205/gallery.500-social-media.fortune/5.
who Tweeted a coffee to one of their friends or followers (see html), and in 2008, it was awarded the 2008 Groundswell
blissxo.com/free-stuff/deals/cash-back-and-rebates/ Award by Forrester Research. The site is very popular on
free-5oo-starbucks-gift-card). Facebook where it has millions of fans, (sometimes more popu-
lar than pop icon Lady Gaga). Starbucks attributes its success to
Starbucks’ Activities on YouTube, Flickr, Pinterest, ten philosophical guidelines that drive its social media efforts.
and Instagram Sources: Based on Brohan (2015), Panagiotaropoulou (2015),
Straut (2015), Loeb (2013), Moth (2013), Allison (2013),
Starbucks has a presence on both YouTube (youtube.com/ Schoultz (2013), Welch and Buva (2015), mystarbucksidea.
Starbucks) and Flickr (flickr.com/Starbucks), with a selec- force.com, blogs.starbucks.com/blogs/Customer, and star-
tion of videos and photos for viewing. It also runs advertis- bucks.com (accessed March 2016).
ing campaigns there. Finally, Starbucks has about 7.9 million
followers on the photo-sharing company Instagram (insta-
gram.com/Starbucks). LESSONS LEARNED FROM THE CASE

The Starbucks.com case illustrates the story of a large
Starbucks Digital Network retailer that is converting to be a digital and social enter-
prise. Doing business electronically is one of the major
When customers are at Starbucks, they have more than activities of e-commerce, the subject of this book. The
Wi-Fi, they get access to the Starbucks Digital Network case demonstrates several of the topics you will learn
from all major mobile devices, including tablets and smart- about in this chapter and throughout the book. These are:
phones (see starbucks.com/coffeehouse/wireless-internet/
starbucks- digital-network). The Network, in partnership 1. There are multiple activities in EC, including selling
with Yahoo!, features free premium online content, such as online, customer service, and collaborative intelli-
news, entertainment, business, health, and even local neigh- gence.
borhood information channels. In 2014, Starbucks switched