Starbucks is using their AI technology, Deep Brew, to hone customer personalization and to monitor vaccination progress in multiple markets throughout the world, CEO Kevin Johnson revealed in Tuesday’s earnings call for the second quarter ended March 28.
“Our work in AI is providing Starbucks the underlying predictive models, enabling us to fuel the great human reconnection by freeing up partners to do what they do best, connect with customers and deliver a world-class customer experience,” Johnson said during the call. “Elevating the customer experience is another fundamental business driving initiative underlying the growth at scale agenda and perhaps the most important of all of our priorities.”
First announced in 2019, Starbucks’ Deep Brew program uses machine learning technologies designed to optimize store operations like inventory and scheduling, to ease some labor pressures. In a spring 2020 update on the program, Starbucks said they would be further investing in Deep Brew to help the company adapt as they “accelerate their retail transformation.”
Currently Deep Brew is automating daily inventory offers, supporting partner scheduling, and optimizing customer experience by calculating personalized offers and suggestions for customers “across hundreds of U.S. stores.” The technology is also doing predictive analytics to monitor vaccination progress in Starbucks’ markets globally.
In the earnings call, Starbucks also updated shareholders that the company has now completed 70% of “strategic store closures” outlined in their plan announced last year to overhaul their store portfolio to “meet customers where they are” with new mobile-focused store formats in urban areas and traditional cafes with drive-thrus in more suburban and rural communities. Approximately 200 of those new store replacements have now opened.
Starbucks is also continuing to focus on the Starbucks Rewards program, which currently represents about 52% of total sales. The company added one million new members last quarter with the goal of doubling their 20 million active members sometime down the line.
For an in-depth look at the numbers in Starbucks’ Q2 earnings, see our analysis here.
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