Starbucks: Social Media Domination

Many companies have transformed their online presence by implementing innovative social media marketing strategies to gain insights and create valuable experiences for their customers. And although social media provides many benefits for marketers, it is critical to understand offhand that social networks are merely a form of technology. According to Groundswell, too many companies believe that understanding the rapidly changing technologies will equip them for the new world; however, that is simply not the case. In order for marketers to be successful, they must concentrate on the relationships, not the technologies. Only by understanding relationships and the way in which people connect with one another can marketers really determine how the power shifts.

A company that really understands the groundswell and currently dominates the social media scene is Starbucks. In terms of Facebook specifically, Starbucks has over 20 million fans, which is far more than any other brand. How has Starbucks achieved such success and how have they managed to engage their customers? Starbucks views their Facebook page as a way to have and maintain a relationship with their customers. It is a place where customers can comment on their favorite drinks as well as relay their personal experiences. Starbucks is highly aware of their audience base and really uses their Facebook page as a channel in which they can listen to their customers.

For example, when Starbucks was in the planning stage and deciding how to launch their new instant coffee, Via, they first went through their Facebook page for feedback from their customers. They listened to what their customers had to say and their opinions on this new instant coffee, because this product was completely different from the message that Starbucks had pushed in the past. Facebook allows for more customer involvement and it is beneficial for companies to really take advantage of their loyal customers to understand their needs and wants. By listening to their customers, Starbucks was able to gain insight on how to introduce Via to the market and be successful at doing it. 

In terms of creating valuable experiences for customers, Starbucks has added many features and applications to their Facebook page in order to keep their customers engaged. Something interesting that Starbucks has managed to do is promote their Starbucks Card through Facebook. The Starbucks Card can be ordered, used, and filled online. Facebook users can gift a Starbucks Card via Facebook or manage their own card accounts. This approach is simply brilliant because, with the click of a button, any Facebook user can purchase a new Starbucks Card online to give to a friend without even leaving the Facebook website.

Another way in which Starbucks engages their customers is through their "Around the World" application located on their Facebook page. Due to the fact that Starbucks has a global presence, they use this application as a way to promote their activities worldwide. Since social media is primarily driven by user awareness, this is an excellent concept to showcase Starbucks’ global impact and involvement in charities. Starbucks also takes it further by using the Events tab in Facebook to promote their new specials and product launches to generate interest in the Facebook community. Facebook fans of Starbucks have the opportunity to virtually attend Starbucks events launching new products or concepts. Starbucks has progressed significantly over the years and now does more than just market their product, they create influence around the world.

Content promotion is another method in which Starbucks is able to keep their customers engaged. Starbucks constantly updates specials and new product information and facilitates conversation with fans by asking questions directly to customers. This is a hugely successful component of social media marketing for any e-commerce or retail business. Starbucks has generated a serious following for their brand by constantly engaging and interacting with customers online.

Starbucks has really been able to master the groundswell by focusing on relationships and not on technologies. However, that does not mean that they did not invest time and money in using technologies to supplement the relationship that they had with their customers. What marketers can take away from the Starbucks media example is that in order to facilitate a closer relationship with its customers, companies must engage with them as often as possible. When a customer actually sees a company listening, responding, and answering their questions, it will solidify customer loyalty and create a positive reputation that will spread like wildfire online. In sum, social media has many benefits for companies that use it properly and are able to gain insights and create valuable experiences with their customers. 

Below is a informative interview Social Media Examiner had in May of 2010 with Alex Wheeler, the Director of Digital Strategy at Starbucks, on how to engage customers using social media:

Starbucks from Michael A. Stelzner on Vimeo.

Walmart - Customer Data Accumulation

Walmart serves customers and members more than 200 million times per week at more than 8,986 retail units under 55 different banners in 15 countries (WalmartStores.com). It is now the world’s largest retailer in its own category of general merchandise and groceries. The Walmart mission statement is to save people money so that they can live better lives.

Walmart has now emerged as the most powerful retailer with access to unimaginable amounts of consumer data. The company’s impeccable tracking strategies and customer data accumulation has caused many privacy advocates to reevaluate Walmart’s intentions.  Over the years, Walmart has been able to capture valuable customer data and by doing so, it hopes to gain additional information to position itself to better respond to customer needs and wants, while staying ahead of its direct competitors.

Given the enormous amount of data that Walmart captures, do you think they have been successful at converting into an experience that serves as a competitive advantage for them?

Without a doubt, Walmart must be doing something right. The fact that this company has dominated the entire marketplace is no accident. The large amount of data that Walmart has accumulated has allowed them to stay one step ahead of their competition and consumers as well. Backed by the trillion of bytes’ worth of shopper history that is stored in Walmart’s computer network, Linda Dillman, Walmart’s chief information officer, felt that the company could essentially “start predicting what’s going to happen, instead of waiting for it to happen.” In this aspect, Walmart has been successful at converting the data into an experience that serves as a competitive edge for them. For example, by knowing in advance that strawberry Pop-Tarts increase by seven times before a hurricane allows Walmart to ensure that products are kept in stock at all retail stores based on expected demand.

Over the years, customers have come to rely on Walmart to have the lowest product prices. This has been Walmart’s greatest strength and it has allowed the company to flourish and dominate the competition within the marketplace.  However, along with the immense power that this company holds comes the responsibility of delivering results that meet customer expectations while also maintaining the satisfaction levels of its customers. Historically, Walmart’s focus has been on the product it sells and not to whom it sells them. This is largely because Walmart is in the everyday-low-price market, and because of this, more emphasis is being placed on products as a whole and not directly on the consumer. In many ways, the data that Walmart has collected is in turn used to forecast and drive Walmart’s business. By ensuring that they have a wide assortment of products in stock and at the best competing prices, Walmart can make every customer experience a positive one by displaying their sense of dependability. Customers often become discouraged from shopping when they cannot rely on replenishment of favorite brands or items, and Walmart is doing everything in its power to prevent this from occurring to ensure consumer happiness. And ultimately, happy customer experiences lead to repeat visits to Walmart in the future.  

What do you think about the privacy issues associated with all of that data and the amount of personally identifiable data they are able to capture. Does it bother you? Do you trust them with it?

Walmart’s ability to track and gain so much data on each and every consumer is a bit daunting and worrisome. Although Walmart hoards its information obsessively and does not share any of its consumer data, this sense of privacy invasion is still a pressing issue for many individuals. The fact that Walmart can find out mortgage amounts, court dates, driving records, and creditworthiness, as well as personally identifiable data such as a person’s social security number and driver’s license number is frightening.  

As a consumer, I feel threatened by their ability to have so much data about me and I personally do not trust them fully with all the personal information that they have obtained. Although Walmart stands behind their privacy policy, privacy issues are still a concern as Walmart continues capturing information that goes beyond grocery purchases. What is their intention behind this if they claim to focus on products and not customer-intimate relationships (hence the lack of loyalty programs)? And what does Walmart hope to achieve by having such personally identifiable consumer information lingering in their records?

In addition, as radio frequency identification tags are becoming more prominent on Walmart products, this raises more concern for the consumer. While the tags can be removed from clothing and packages, they cannot be turned off and also have the ability to be tracked. The very thought of purchasing a product with tracking capabilities is disconcerting, due to the fact that the company tracing the product can essentially follow a consumer’s every step. On the extreme end of the spectrum, some privacy advocates even hypothesize that unscrupulous marketers or criminals will be able to drive by consumers' homes and scan their garbage to discover what they have recently bought. Below is an image that further illustrates RFID tags and privacy concerns on a pair of jeans sold at Walmart:

What impact do you think they are having on their suppliers - making them better and more efficient or driving them too hard and reducing their profitability? Again, try to keep this in the context of technology.

Suppliers are heavily impacted by Walmart. The advanced technological tracking that Walmart is currently using and will continue to use in the future is greatly affecting its suppliers, and not particularly in a positive manner. Walmart recognizes that technology is a critical tool for them to maintain an efficient supply chain and therefore is very strict with its suppliers. As Walmart grows in power, it is also becoming more dictatorial, and suppliers cannot afford to disagree with their demands if they hope to gain profits.

Walmart is ultimately driving its suppliers too hard and reducing their profitability. As Walmart continues using RFID tags on merchandise, suppliers shoulder the burden of this widespread effort. According to Kara Romanow, an analyst at AMR Research Inc., “Right now, the benefits of [RFID tags] are primarily for Walmart, and the costs are the responsibility of the suppliers.” The expanded use of RFID tags in the future is expected to support loss prevention, more-efficient recalls and properly stocked retail shelves for Walmart.

Not all suppliers agree with the implementation process of RFID tags; however, many suppliers are going along with this because Walmart is their biggest customer and it is not quite an optional choice for them. Because of this, Romanow states that “many of Wal-Mart's suppliers are more convinced than ever that there is no return on investment, and even worse, consider their technology investments to be a throwaway thus far. Because of this, they've only spent the bare minimum needed to comply." This advanced technology that Walmart has implemented has resulted in many distressed suppliers upset by the giant retailer’s mandate of RFID program deadlines that they believe are personally unbeneficial to them. 

No More Viagra Ads: Maybe Behavioral Targeting Isn't So Bad

Advertising has become increasingly personal. Through online behavioral targeting platforms and other profiling techniques, advertisers are now able to determine more accurately who their audience is, how best to reach them, and what specific products those users should be exposed to—all determined simply from their expressed interests and online page navigations. Advertisers’ ability to know that I am a female between the ages of 18-24 through their collection of the personal information that I have provided on my Facebook account, for example, suggests that they are better off showing me an ad for Dove Body Wash than for Viagra.

The increased ability to track, aggregate, and profile consumer behavior to better direct advertisements to consumers is most certainly a result of advancements made in technology. In Joseph Turow’s article, Audience Construction and Culture Production: Marketing Surveillance in the Digital Age, Turow makes a number of strong arguments for how this shift in advertising and direct marketing comes from technological advancements as well as  the advertising industry’s construction of the consumer.

It is often said that consumers presently hold the the majority of power in the marketplace. And although I agree that we have more power than ever before as consumers in relation to the ad industry, I argue that advertisers also have gained a substantial amount of power due to the fact that, according to Turow, power is gained through the accumulation of resources. As a result of the increased ability to more accurately track, aggregate and profile consumers, advertisers have more resources, and therefore increased leverage over consumers.

Although more power has been placed in the hands of consumers, have we as users exchanged our personal privacy for that power? As technological platforms gather and interpret behavioral consumer data to profile us in ways which would normally cause concern for the average human being, a privacy debate has surfaced in the world of advertising. Is it unethical for advertisers to obtain information about us, or is it their right if we are actively providing that information when we browse and utilize Web Sites such as Amazon and Facebook, which require a substantive amount of personal information from its users?

The key questions are as follows:

• If people are so willing to publicly share their identity online through social media and other sites that require personal information, why are they so against behavioral targeting, which only captures their behavior and not the actual identity of the person behind it?
• How will advertisers work around this privacy issue and reveal to consumers that behavioral targeting can actually be beneficial to both parties?
• What is the reasoning behind why some consumers allow advertisers to behaviorally track their online activity?
• Do consumers that approve of behavioral targeting view this tracking as more of a mutually beneficial relationship with the brand or advertiser?

Advertisers’ attention towards the behaviors and details of consumers, in congruence with technology advancement, contribute to the increased personalization in advertising today. Turow made a valid point in his article highlighting the advertising industry’s construction of the consumer, but in a fragmented digital media world where consumers have the ability to fast forward and ignore ads, technology that can better ensure that consumers are exposed to advertisements is critical to the advertising industry’s survival.

The shift from general advertising—otherwise known as ‘above the line’—where traditional media such as TV and radio were used to produce artistically creative advertisements, towards direct marketing—‘below the line’—a more analytic and scientific approach where actions are encouraged such as links to click, products to buy, etc., has enabled the advertising industry to flourish. The ability to track, measure, and interpret the response rates to advertisements is essential. Direct marketing, largely due to the technology that was created in congruence with this form of advertising, enables just that—measurable marketing. So, one can see in direct marketing how the ability for increased personalization is possible and most successful for advertising agencies as a result of both technology and the marketers' ability to construct the identities and culture of consumers.

This topic is of great interest to me because I feel that behavioral targeting is very prevalent online and has quickly taken over the online space. Behavioral targeting has branched into a network of sites, emails, and also social media platforms. And as technology has evolved, so has the need to better target consumers. The industry is crossing an inflection point, passing from the conventional mass media interrupt and repeat model to a family of advertising models centered on relevance. Consumers are spending more time online and consumer adoption of new technologies has encouraged advertisers to experiment with and employ new online advertising strategies to engage consumers. Advertisers ultimately want consumers to learn about brands, participate with brands in new ways, and to create new brand meanings.

This research topic connects to the gathering and identification of customer insights and the design of valuable customer experiences by attempting to understand why users feel threatened by behavioral targeting. How much personal information is a consumer willing to give advertisers before enough is enough? And will consumer privacy issues limit the effectiveness of behavioral targeting for advertisers in the future? 

My (10.Deep) Brand Experience

During the summer of 2009, I was in New York for an internship and my boyfriend, Patrick, came to visit for 4^th of July weekend. Since he had never been to New York, we made a list of places to cover, and finding a 10.Deep clothing store was one of the top items on our list. 10.Deep is a street wear brand that stresses the importance of the bold power of the individual. The brand also values the music community, and as one of the original New York street wear brands, their motto is simple: forget everyone and listen to yourself. Strength lies in the hands of an individual (10 fingers), not in the approval of one's peers.

So on with the actual experience… we just decided to google map the location and simply typed in 10.Deep. It pinpointed a location and Patrick and I decided to make our journey over. Once we arrived at the location specified on the map, we were a bit confused. It led us to an old and somewhat sketchy building that looked under construction. We didn’t come all this way for nothing, so we went on up to the specified room number, #511. I felt relieved that we went during the daytime because the narrow hallways seemed to be closing in on us. Graffiti was sprayed all over the walls making us second guess our decision to enter this old building until we finally reached room #511. It was definitely not what we were anticipating, a closed wooden door with a peephole, a small yellow 10.Deep sticker and a sheet of paper stating the hours.

We knocked on the door and waited for a moment until a man came and answered the door. He asked what he could help us with and we realized that the place at which we were at was not a store, but actually the 10.Deep headquarters. Regardless of the mistake, the man let us in and showed us around. The place was full of clutter, but what caught my eye was a couch surrounded by photo lighting umbrellas, a table with opened bottles of liquor, and racks of new 10.Deep branded clothing.

The man introduced himself to us and was named Rob. He really took the time to make us feel comfortable. Rob mentioned that this was not the first time in which he had customers enter the 10.Deep headquarters instead of the retail store, and for us not to feel embarrassed. He then invited us to sit down and chatted with us a bit, enhancing our overall experience. He could have simply informed us that this was not the retail store, and led us out. But instead, he asked us where we were from, and after letting him know that we were from Austin, he quickly mentioned other street wear clothing stores that he enjoyed visiting there. He told us other various locations in New York in which we could purchase 10.Deep clothing and said that he appreciated us for stopping by. He then gave us two Kid Cudi mix tapes and 10.Deep sticker labels so that we would not leave empty handed. While it was nice to receive the mix tape and sticker labels free of charge, the physical materials did not matter as much as the sentimental gesture that was expressed. I will honestly admit though that I am a Kid Cudi fan, and that this experience may have been enhanced by my one degree of separation from him.

(Side note on Kid Cudi: Kid Cudi modeled clothes for the 10.Deep lookbook while pursuing a rapping career. 10.Deep supported him by branding his mix tape and helped to push the promotion of Kid Cudi as an upcoming new hip hop artist.)

The manner in which I experienced the “10.Deep” brand was an unexpected one. Rather than ending up in a retail store, I ended up at the 10.Deep headquarters. The exceptional customer service that I received exceeded my expectations and ultimately led to a particularly meaningful customer experience for me. From a strategic experiential marketing perspective, this was the breakdown of my experience:

1) Sense

From my personal experience with 10.Deep, SENSE marketing played a key role. In terms of sight, I was able to clearly see that attention to detail was something important to 10.Deep (perhaps even more so because they are a clothing company and exposure is inevitable). The brand has a simple yet memorable logo design with the Roman numeral “X” incorporated into the zero in the number ten, as well as their signature trademarked brass knuckles. Physically being in the headquarters took my senses to a whole new level. Upon walking in, I was immediately able to sense the laid-back atmosphere, see some of the creative processes taking place, smell the sawdust from the construction and hear the sound of hip hop music playing in the background.

2) Feel

FEEL marketing appeals to customers’ inner feelings and emotions. To sum up my 10.Deep experience in one word, I would say that this specific customer experience made me feel valued.  Rob really took time out of his day to sit down and get to know Patrick and me a little better. As a consumer, our overall aim is to obtain a feeling of appreciation and sense of importance from a brand – to feel that we really matter. 10.Deep successfully made that happen and created an affective experience resulting in a positive mood and strong emotion from both Patrick and me.

3) Think

Through this experience, I think that 10.Deep really knows how to cater to their customers. As a street wear clothing brand, it is essential for there to be a connection between the brand and its customers. Clothing is visual to the public, and thus portrays somewhat of an identity on that specific consumer to those around them. Good companies appeal to the intellect and 10.Deep strives to achieve this in their consumers by relaying the important message of individual strength and power. This experience really made me think about the impact that branded clothing can have on an individual and even take that one step further in examining how brand meaning acts as a key role for consumers.

4) Act

10.Deep aims to affect a certain lifestyle interaction with its consumers. Being a street wear clothing label, yet having a presence in the music industry as well really allows its customers to engage with 10.Deep on a more interactive level. ACT marketing aims to affect bodily experience, lifestyles, and interactions. 10.Deep successfully differentiates themselves by being more than just a clothing label. Their involvement in the music community provides another connection for me, as well as other consumers, to actively form a closer relationship with the brand.

5) Relate

This section of RELATE marketing appeals to the individual’s desire for self-improvement, positive perception among peers, and association within a larger social group. 10.Deep’s motto of self-empowerment is a subject relatable and relevant to almost everyone. Having such a positive and personal customer experience with 10.Deep really made me feel relatable to others who wear their clothing because we share the same values for a deeper understanding of self.

Just Who Exactly am I?

DEMOGRAPHIC PROFILE
Median Age: 23
Single
No children
Graduate Student
Median Income: $3,500 (From Financial Aid Work-Study Job)
Heavy debit card user
Apartment Renter

LIFESTYLE
Home Life: houseplants, crafts, do-it-yourself mentality, owns dogs
Audio/Video: iPad and iPod owner, personal laptop
Sports and Fitness: P90X, running/jogging, tennis, outdoor activities 
Other Interests: food, fashion clothing, traveling, art, movies


1. What do you think and feel?

- What really counts?

What really counts in my life is happiness—happiness in where I am in life, what I’m doing, and who I’m spending my time with. Both my family and friends serve as very important foundation in my life, and I cherish knowing that they support me in everything and anything that I choose to do.

- Major preoccupations?

Definitely school. I am currently in my first year of graduate school and am hoping to finish in a year and a half. Being from an Asian household, education has always been of utmost importance. My parents expect me to excel and work hard in everything that I do. They have often told me to treat school as my “full-time job.” I don’t want to let them down, or myself.

- Worries & aspirations?

Perhaps my biggest worry is not ending up where I want to be, and not having the career that I feel is right for me. I have invested so much time and money in school studying something that I am unsure of whether I am really passionate about. I know people say that it’s never too late to do something else, but monetarily, I feel that it can be a struggle.

As for my aspirations, one thing that I am sure about is my love for food, and basically everything that encompasses food. So, one day in the near future, I hope to work for the Food Network in New York City. Food Network is committed to exploring new and different ways to approach food, which I find intriguing and captivating. However, as a backup plan if that should fall through, I hope to do marketing for a large company like Unilever or PepsiCo and get involved with consumer product brands in the food and beverage industry.

2. What do you see?

- Environment?

My personal environment must be simple and orderly. I am a perfectionist and neat-freak so due to the fact that I need order in my life, I also need order in my environment.

- Friends?

My friends mean everything to me and there are a select few that I am close to. Throughout my life, I have met many interesting people and have formed many acquaintances along the way, but there are always my close friends that I will never lose touch with. And although we are pulled apart to different cities due to careers and familial obligations, the bond that was made is never lost.

- What the market offers?

It is difficult to keep up with what the market offers because there are always so many different products and services offered the average consumer. It is often said that variety is the spice of life, and I agree with that. I enjoy having the option of changing things up every so often and buying different brands.

3. What do you say and do?

- Attitude in public?

I am generally a shy person when I am around unfamiliar faces; however, I do try and make an effort to socialize and meet new people. I also almost always have a smile on my face.

- Appearance?

I love fashion, but I don’t really keep up and read about new and upcoming trends. I tend to simply purchase what I think is aesthetically pleasing, and just go with it. As a college student with limited pocket change for clothes, I tend to stick to clothing that is comfortable, versatile, and affordable.

- Behavior towards others?

I am a friendly individual that is sincere and genuine. Being an optimist, I always see the glass as being half full. I am also generally a very positive person and find pleasure in being a good listener.

4. What do you hear?

- What friends say?

Currently, as many of my friends are in the same stage of life as I am in, popular topics that are often discussed include career choices, relationship issues, leisure activities, and upcoming events.  

- What bosses say?

I am a very diligent worker and also a fast learner. Many supervisors that I have had in the past have told me “Good Job, keep it up!” I am very organized and often create to-do lists to ensure that I finish all the duties assigned to me in a timely manner. I also make sure to deliver quality work that I am proud of.  

- What influencers say?

Influencers say things in such as a way that persuades others to follow them. They are early adopters as well as activists and get those around them involved. Influencers can be very convincing and often pave the way in setting trends. I actively listen and take heed of their advice, but may not necessarily follow or get involved unless I feel that it is beneficial or of personal interest to me.

5. What are your pain points?

- Fears?

I fear working full-time until I’m 65 years old and finally able to retire. Being in school for so long and having so much free time is something that I have come to enjoy. I like working around my own schedule and doing things whenever I want to do them. Working in a cubicle (and hopefully an office one day) from 9am-5pm is a bit terrifying at this moment in time.

- Frustrations?

I hardly get frustrated. I am an extremely patient person as shown by my love for 1000 piece puzzles. Whenever a difficult challenge occurs, I take time to rationalize and think of the best solution so that I can efficiently and effectively choose the best option to complete the difficult task at hand.

- Obstacles?

Personally, I feel that my main obstacle is narrowing down what I want to do with my life and finding the correct career path for me. I don’t want to be trapped doing something that I don’t enjoy for the rest of my life.

6. What do you hope to gain?

- Wants/needs?

Ultimately, I want to be happy. I want to be constantly challenged and never stop learning. I want to travel to all the continents except Antarctica. I want to not worry so much about the future. And I need my family and friends by my side for support and encouragement.

- Measures of success?

I measure success mostly in terms of personal achievement and happiness in life. However, I would be lying if I said that money didn’t play a factor.  

- Obstacles?

Maintaining a life of happiness and fulfillment. By keeping a sensible head on my shoulders and surrounding myself with people that love me, I feel that a happy and fulfilling life is definitely possible!