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Natalie Tatum

How Starbucks CEO Kevin Johnson is Prioritizing Human Interaction

How Starbucks CEO Kevin Johnson is Prioritizing Human Interaction 764 458 Natalie Tatum

Kevin Johnson is the president and chief executive officer for Starbucks, passionately and proudly carrying on the Starbucks legacy of human connection in all of his initiatives as he leads over 330,000 Starbucks partners in more than 28,000 stores around the world. 

Since becoming the CEO in April of 2017, heightening human interaction beyond customer service has been at the forefront of Johnson’s projects, believing that shared experiences create common understandings, beliefs and languages. Because of this, those working at Starbucks are referred to as partners, not employees, citing that the term fosters a sense of equality and shared vision. 

At his featured Keynote at NRF 2020, Johnson said that “Starbucks has worked to create a special customer experience grounded in human connection” that “ comes together in a comfortable third place, a community different than home or work.” 

When asked about what inspires him to bring back human interaction in the height of commercial technology, Johnson mentioned his disdain of how this age of unparalleled digital connection has brought with it an age of unprecedented human disconnection.  

“While technology has done many wonderful things, it’s also changed behaviors in a way where people don’t interact with one another nearly as much, which is unhealthy and I think is contributing to a global epidemic of human loneliness. I realize that serving 100 million customers a week at Starbucks means we have at least that many opportunities to enhance human connections and perhaps create that sense of community and a place where people feel more connected face-to-face with other people.” 

This sense of community can be seen not only in traditional Starbucks stores, but in their specialty-focused stores for military families and deaf communities as well. The Starbucks Signing Store and Military Families Stores aim to provide a hyper-welcoming environment for all customers, with particular recognition and support of the local military and deaf communities in the cities the stores are found in. The Starbucks Signing Store is located in Washington D.C., while the Military Family Stores can be found in Austin and El Paso, Texas, Clarksville, Tennessee, Newport, Rhode Island, and Bedford, Massachusetts, all located in military camp and base communities. 

Johnson isn’t only encouraging the creation of micro-communities in stores to heighten customer experience. Starbucks Deep Brew is a technology initiative working on a broad suite of tools to elevate almost every aspect of the business, eventually helping to automate many aspects of the store life. Primarily, it will act as an invisible, super-smart sidekick to baristas to elevate the Starbucks experience for the customer. It can help with tracking inventory, supply chain logistics and replenishment orders, allowing partners extra time to focus on fostering meaningful interactions with customers. With more time dedicated to perfecting customer interactions, Starbucks can create micro-communities in every neighborhood that feel personalized and prioritized. 

Behind every aspect of Johnson’s hopes for Starbucks to headline customer service is his tried and true rapid cycle plan of bringing ideas to implementation in 100 days. Off the bat, Johnson saw the need to perfect new ideas and initiatives for 31,000 stores. Instead of focusing on mass implementation, Johnson recommended working on advancements in levels, measuring success by what you learned at each individual step along the way and perfecting initiatives in one store, learning from the process, and taking that expertise to the next store. 

Johnson’s drive and passion for creating a community can be seen from a mile away. His excitement strengthens Starbucks’ legacy of connection from president to partner and continues to pave the way for the future of technology’s role in human interaction.

3 Key Takeaways from NRF 2020

3 Key Takeaways from NRF 2020 1200 800 Natalie Tatum

The National Retail Federation (NRF) Big Show is not an event to be missed. Retail industry leaders from around the world gather for three days in the retail capital of the world, New York City, to discuss upcoming trends, technologies, and troubles that the world of retail and its consumers are facing.

In 2019, NRF taught us about the importance of transparency in retail, the evolving workforce, and how personalization all come together to amplify customer experience. In 2020, NRF shifted more towards personalization to stress how important it really is to not only know your customer, but to be their eyes and ears in the global marketplace. Here are the top three trends we saw from NRF 2020 that are shaping the future of retail. 

Bringing Back the Human Element of Retail 

In a world where automation and artificial intelligence are at the forefront of most retail operations, NRF flipped the script by highlighting the importance of customer interaction and fostering human connections in the workplace in multiple sessions during the three day event. 

Newly appointed Walmart CEO John Furner described how his time with Sam’s Club made him realize that the best way to connect with the customer isn’t through relatable ads on social media, but by re-introducing sales associates as brand ambassadors that can aid and guide you through your shopping process. 

“I visited our Club in Lubbock, Texas, and met the club manager, Jerry, who had worked at the company for 18 years. I asked him a couple questions about his business and he immediately stepped to the back. He had 15 team leaders in front of him and said, ‘They’re going to answer all your questions.’ As I started learning from them, they were not only answering my questions, they told me everything you’d ever want to know about the business, and what it takes to run a business in Lubbock, Texas. At the end of that, it was so clear that if we could replicate that in 100 buildings, we would have the basis of a winning strategy.”

Furner also cited that bringing store leadership out to the floor and away from the front office had a substantial impact on operations and problem solving in the retail space. Where before leaders wouldn’t hear of an issue until it had already been attempted to be fixed, they were now hyper-aware of every moving element in the store, allowing them the opportunity to assess problems, evaluate opportunities and implement new techniques in a more timely manner.

Furner also mentioned that improving the work experience wasn’t only associated with increasing pay and salary. While Walmart did increase pay and salary, Furner cites that one element of major success for Walmart employees comes from rolling out programs that make it easy to change schedules to accommodate work-life balance as well as initiatives to enhance in-store productivity. 

In a separate session “Humans are Back: Why Companies are Putting a Premium on the Human Element of Retail,” PSFK CEO Piers Fawkes divided the delivery options with personal utility into five categories: inspire me, meet me, serve me, value me, and know me. Each category highlights a different element of nurturing a relationship from retailer to customer, citing personalized recommendations, convenience, and solution-based sales behind each reason. 

In a recent survey by PSFK, data showed that 70% of consumers expect a retailer to offer them the same level of personal service whether they are shopping in a physical store or on their mobile device. With initiatives across the retail industry focusing on bringing human experience and expertise back to customer service, the importance of connecting with the customers in a traditional way was at the forefront of NRF 2020. 

Micro-Experiences are a Must

The micro-experience isn’t a new idea or trend in retail. Retailers have been focusing on the small format, in-store activations that engage consumers in a way that can’t be replicated online for the greater portion of the last 10 years.  However, traditional micro-experiences are being left in the dust by industry leaders Rent the Runway, L’Occitane, Nike, Foot Locker, and CAMP. 

Rent the Runway, an online service that provides designer dress and accessory rentals, recently partnered with W Hotels to find a solution for everyone’s least favorite part of traveling: packing and unpacking. The partnership allows customers to reserve and rent their clothes online and have them delivered, hung, and ready to wear in their hotel room when they arrive. 

L’Occitane maximized on a sensorial and immersive micro experience in their New York City Flagship store by taking customers on a virtual reality journey to Provence, their founding city. Guests are also encouraged to touch and feel products under a “rain shower” sink and be transported to the south of France while sitting under the store’s Mediterranean-inspired olive tree. 

Nike’s “Vending Machine” challenges retailers to rethink loyalty programs beyond points and discounts. After finding that 40% of customers use the Nike app, Nike introduced exclusive member rewards for customers that use the Nike Training Club activity app that provides members with personalized access to limited edition product collections that correspond to the training activities they frequent the most. Members only sales, promotions, in-store events & services such as ‘Clean Kicks On Us’ and “Nike Master Trainer Fitness Class” ensure loyal customers receive curated experiences and exclusive benefits.

Foot Locker opened “regional power stores” in Detroit and Philadelphia after first introducing them in Liverpool and London. The stores feature exclusive products and touches tailored to local taste, aiming to deliver on “experience” and hoping to rebrand into a “hub of local sneaker culture, art, music and sports” by hosting traffic-driving community events like pop-up nail salons and Xbox gaming sessions.

CAMP describes themselves as a family experience store designed to inspire and engage families by combining merchandise, play and media. Inside camp are rotating themed experiences, where “every surface is a seamless blend of play and product.” With themes like Base Camp, Toy Lab Camp, Travel Camp, and Cooking Camp, both merchandise and experience are constantly changing to ensure customer loyalty and interest through each quarter. 

Micro-experiences of the past now turn a blind eye – but by looking at these industry leaders, it’s easy to see how micro-experiences have rebranded from a simple in-store event to a fully integrated shopping experience. After all, according to a study conducted by Expedia and the Center for Generational Kinetics, 74% of millennial shoppers said that they would rather pay for experiences rather than things. 

Emotion-Fueled Purchases

Now more than ever, consumers are shopping with alternative causes in mind. In the session The Rise of the Emotional Economy: Honesty, Empathy, and Integrity Resonate with Consumers: Leslie Ghize of TOBE and Amy Vener from Pinterest, Ghize stressed that retail is switching from a commercial to an emotional economy. 

When evaluating brands, consumers primarily use emotions, their personal feelings and opinions rather than brand information or facts to craft an opinion. Advertising research revealed that the consumer’s emotional response to an ad has a far greater influence on their reported intent to buy a product than does an ad’s content – by a factor of 3-to-1 for television commercials and 2-to-1 for print ads. 

Additional research conducted by the Advertising Research Foundation concluded that “likeability” is the measure most predictive of whether an advertisement will increase brand sales. Studies show that positive emotions toward a brand have a far greater influence on consumer loyalty than trust and other judgments, which are based on a brand’s attributes. 

Ghize went on to say that “brands need to look more actively and purposefully at the culture buzzing around them – in entertainment, in fashion, in news, on social media – and use that awareness to inform how they should best position and integrate themselves into the world.”

Following the publishing from a SAP 2018 survey on socially conscious companies, Alex Atzberger, president, SAP Customer Experience, SAP said “we live in an experience economy in which consumers care not just about products but also about a company’s purpose, value and global impact. For retailers this can be decisive while competing during the holiday season, when shoppers are spending more than at any other time of the year. Our survey findings indicate that when a company closely connects its purpose to the brand, chances are customers will relate to it on a more personal, human level – which supports customer loyalty and completes the customer experience.”

Advancements in customer service, micro-experiences and cause-conscious shopping are shaping the world of retail at a rapid rate. Lessons we learned from NRF 2020 not only pertain to major retailers like the Walmarts and Nike’s of the world, but the grocery industry as well. Through 2020, retailers far and wide should prioritize the value of a heightened person-to-person interaction, the power that a micro-experience has on a shopper, and the strength of harnessing consumer emotion in a progressive way. With these tools under your belt, any industry can shape the future of retail in their own unique way. 

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