How Star­bucks is brew­ing new data dri­ven busi­ness mod­els

Back­ground

Since the first cof­fee house was opened in 1555, there has been a glob­al mar­ket for cof­fee shops and sig­nif­i­cant busi­ness oppor­tu­ni­ties. To ensure sus­tained growth, local cof­fee shops now extend their offer­ing to a chain across var­i­ous cities and coun­tries. A sig­nif­i­cant play­er in recent years is Star­bucks.


Between 2001 and 2007, the num­ber of stores grew from 4,000 to 16,000 stores while still main­tain­ing a healthy prof­it mar­gin. This use case shows one key ele­ment that has helped them stay ahead of com­pe­ti­tion all over the world by lever­ag­ing on open data.

Datasets used

A key source of inter­nal data was the Star­bucks mobile app. How­ev­er, this inter­nal dataset alone was not suf­fi­cient to gain insights and make crit­i­cal deci­sions. Besides their focus (new cus­tomers) did not have the mobile app. Through a third-par­­ty com­pa­ny, open data on loca­tion of train and bus tops, pop­u­la­tion den­si­ty in spe­cif­ic areas and city demo­graph­ics was analysed and cor­re­lat­ed with their inter­nal data sets. With this infor­ma­tion, Star­bucks is now able to deter­mine loca­tion for new cof­fee shops that will be prof­itable. They also use mete­o­ro­log­i­cal data in plan­ning spe­cif­ic prod­ucts to pro­mote at dif­fer­ent times of the year.

Adva­neo Data Mar­ket­place

The sce­nario described above involved sig­nif­i­cant resources in plan­ning, data gath­er­ing, sort­ing and clean­ing before apply­ing machine learn­ing algo­rithms for pre­dic­tion. Not all local cof­fee shops have the resources to employ ded­i­cat­ed teams for this task. The Adva­neo mar­ket place pro­vides a solu­tion.


Easy to Use: Rather than spend months gath­er­ing and sort­ing through numer­ous data sets, com­pa­nies now have the oppor­tu­ni­ty to get rel­e­vant data in a few clicks. These have been care­ful­ly cat­e­gorised with ver­i­fied end points to cut out unnec­es­sary time spent in search that lead to dead ends.


Pri­va­cy and Secu­ri­ty: All dataset pro­vid­ed on the mar­ket place have been checked for per­mis­sions and licens­es. With one click you can check the per­mis­sion required and lim­i­ta­tions when using the dataset.


Cor­re­la­tion: We under­stand the need to cor­re­late mul­ti­ple data sets. Adva­neo has cat­e­gorised all the data set such that a sim­ple key­word search or click­ing dataset tags will show oth­er datasets you might not have con­sid­ered but may be rel­e­vant in solv­ing your cur­rent chal­lenges.

Impact

The sce­nario described above is not lim­it­ed to cof­fee shops as all major gro­cery chains now employ sim­i­lar mod­els hav­ing inhouse data sci­ence teams. Lever­ag­ing on the open data pro­vid­ed on the Adva­neo mar­ket­place will lead to sig­nif­i­cant reduc­tion in resources need­ed to have an in-house data sci­ence depart­ment as well as lead to new busi­ness insights in a short­er time scale.

Email:
Tel.: 0211 876691–0
Ihr Anprech­part­ner: Jür­gen Bret­feld