In its three year journey in India, Tata Starbucks has seen a good pace of progress with 83 stores in six cities. As it continues to build the coffee culture in the country, the company has put in place several initiatives to enhance the consumer experience, one of which is having Coffee Masters across stores. A certified Coffee Master herself, Tata Starbucks’ Manmeet Vohra tells BrandWagon’s Chandni Mathur what’s brewing at Starbucks India, amidst a coffee tasting session. Excerpts:
Starbucks is set to launch a mobile payment and loyalty app in India. How will it further change the experience? What traction do you get from the Starbucks card?
The mobile payment and loyalty app is definitely something which is brewing and we are excited to be working on it.
It will elevate the experience of My Starbucks Rewards members. It should be out later this year. Going forward, we will also be launching a speciality tea brand, Teavana, which is owned by Starbucks and is available within stores in the US as well as in standalone Teavana boutiques. In India, we will be offering a selection of Teavana SKUs within our stores. It will be available from early 2017. India is the only market to launch the My Starbucks reward program within two years of the brand being in the market. Today we are at about 1.5 lakh members and they are engaged customers. The transactions range between 20-24% generally, but they hit an all time high during Christmas last year due to a promotional campaign.
How do you constantly work on refreshing and keeping the consumer experience engaging?
Our open rates of e-mailers sent to members have touched a high of 48%, whereas the industry average stands at about 20%. Our email rates average around 30-35%. We conduct roundtable meets with our loyalty members every quarter in one store, where we engage with them and they give us feedback.
Christmas is a big property for Starbucks worldwide and the collectibles are very popular. Our gold card members told us last year that they want something which is exclusive only to them and not all customers. We took a big gamble and while every other country in the world was selling the Christmas collectibles, we made it exclusively available to the My Starbucks rewards members who had to earn it. That promotion was very successful and 25%
of the sales during Christmas came from it.
How is the Indian customer unique as compared to other markets for Starbucks?
There are certain differentiators and unifiers. Customers across the world come to Starbucks for the ambience, warmth and the coffee. So we say that our customers come for the coffee, stay for the warmth and return for the human connection.
The differentiators are in terms of the habits, because India is essentially a tea drinking nation. In the US, our peak hours are until noon, but in India the peak hours start after noon. Overseas, people take their coffee on the way to work, whereas here, coffee has more social connotations.
The to-go culture is less in India as people come to Starbucks to spend time and catch up, but it is a question of how people become more familiar with the brand and coffee consuming habits, and these things evolve over time.
Indians love food and the outcome of that is almost 25% of our sales come from food products, which is the maximum for Starbucks anywhere in the world. In terms of the experience, there are no two stores of Starbucks that look similar. Our flagship stores are where a lot of local inspiration is taken.
What are the marketing initiatives that set Starbucks apart from the competition?
In April, we launched a campaign, #MyMoodMyStarbucks. It encouraged our customers to share their mood with us, and we said there is a Starbucks beverage to suit every mood. They had to share their mood through a card, pin it on our community board and when they came back they could try two free customisations. There are several ways in which one can customise their beverages, which people are not aware of, so we try and encourage them to discover it. This is what makes it ‘My Starbucks’. In three weeks, we got 1.33 lakh customers to share their mood with us. It shows that customers want to talk to us.
Currently, there is another summer campaign running, called Starbucks Fun Ventures. If one buys a Frappuccino, they can participate in fun tasks through a card which contains a list. You get a stamp for participating and when you complete the list, you either win merchandise or a pre-loaded card. We have already seen over 2,000 customers complete full challenges in just a few weeks.
Australian café brand Gloria Jean’s Coffees exited India in December, 2014. Operationally, Tata Starbucks had to suspend the use of vanilla and hazelnut syrups following an order by FSSAI. Do you feel India is not an easy country to operate in?
There would be different challenges in different industries anywhere you go. Yes, we have had certain challenges with FSSAI but we have managed to work closely with them and find solutions to get all the required technical approvals. There are a lot of process related issues at times, but I think that does not hamper our spirit in terms of steering the business ahead. In India specifically, in order to take the Starbucks experience forward, real estate availability is a bigger challenge because we want to be wherever our customers want and expect us to be. There is a challenge as far as high streets and malls are concerned. We have to make sure that we don’t compromise on the Starbucks experience.
Your rivals are also reinventing themselves now with the likes of CCD even starting home delivery. How do you view the space and competition?
In India, we have tremendous opportunity to build the coffee habit and drive the coffee passion. There is enough ground for everyone to play on. I feel the more there are players trying to build a coffee culture, the better it is for everyone.
There is still a lot of opportunity in India for brands like ours to drive coffee passion and culture. So we have over 100 certified Coffee Masters across our stores who approach customers and share coffee tasting knowledge with them. We are in our own way trying to drive the coffee passion.
What traction do you see from the Starbucks merchandise?
In terms of cups and tumblers, we have some unique designs and the India mug is always the number one selling mug. We also encourage our customers to bring back their mugs or tumblers to save paper and plastic, and give them a discount of Rs 10 for it. The merchandise sales are a small contribution to revenues, presently in single digits. Once the to-go part increases, carrying the merchandise will automatically grow with that.