Shownotes
This Omni Talk Retail Fast Five segment explores Starbucks’ new ChatGPT-powered drink discovery experience and whether it actually improves the customer journey.
Chris Walton and Ben Miller debate if this is meaningful innovation or just experimentation, and question whether AI integrations like this solve real problems or create unnecessary complexity.
⏩ Tune in for the full episode here.
#RetailNews, #Starbucks, #AIinRetail, #ChatGPT, #CustomerExperience, #DigitalStrategy, #OmniTalk
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Transcripts
Starbucks has launched a beta app within ChatGPT.
Speaker A:It allows customers to describe their mood or upload a photo to receive personalized drink suggestions and then customize and then begin the order in ChatGPT before completing checkout in the Starbucks app or on starbucks.com so, according to Starbucks, the beta app launched on April 15 and is accessible by enabling it through ChatGPT's App Directory and then tagging at Starbucks in a prompt.
Speaker A:Critically, as I just said, checkout does not happen within ChatGPT.
Speaker A:Customers complete the purchase in a Starbucks app on Starbucks.com, which means Starbucks retains all the first party loyalty data and it keeps the transaction in its own ecosystem.
Speaker A:And Chris.
Speaker A:Yes, here we go.
Speaker A:This is also A and M. I.
Speaker B:Love what the guest horse puts me on the spot.
Speaker A:Yes, I've been waiting to do this.
Speaker B:Right.
Speaker A:The A and M put you on stock question.
Speaker A:So firstly, they've asked me to imagine that I'm not in a coffee shop.
Speaker A:I'm in a tea store, a very British tea shop, to play into the full British.
Speaker B:That sounds like A and M to me.
Speaker A:So thank you, Chad.
Speaker A:Okay, here we go.
Speaker A:Given the high usage and historical praise of Starbucks mobile app, are these ChatGPT and other agentic AI integrations a more offensive or defensive play?
Speaker A:So look, in other words, do Starbucks and other brands believe that consumers truly are looking for more inspiration and discovery when they're on the AI platform compared to when they're on the apps?
Speaker A:Therefore, it's incremental or.
Speaker A:Or keep going.
Speaker B:Wow.
Speaker A:Or the customer journeys will eventually go direct to the apps less in favor of these platforms.
Speaker A:So they'll have to integrate everything to avoid losing traffic.
Speaker B:Oh, my God.
Speaker A:That.
Speaker A:Jeez.
Speaker B:Oh, my God.
Speaker B:I took, you know, I've been taking a lot of grief from some folks that I know pretty well about my takes on agentic AI lately, Ben.
Speaker B:Like, I had a friend of mine who I respect a lot.
Speaker B:He told me, and he works for a data company, which I won't say who they are.
Speaker B:I won't say his name either.
Speaker B:But he said his, his.
Speaker B:His boss called him and said, dude, they're Walton's totally wrong on his takes.
Speaker B:So I don't know what I'm missing here because I don't like this move, Ben.
Speaker B:I think that's my answer to the question.
Speaker B:And you know, especially if I was lauding so Starbucks last week for their weekly pay and they're increasing their barista bonuses.
Speaker B:Absolutely.
Speaker A:So good.
Speaker A:So good.
Speaker B:And so this move smells of.
Speaker B:It's.
Speaker B:I Think it's important to put it in context.
Speaker B:This move smells to me of tech teams not being aligned to the business problems and kind of chasing the shiny tech that's out there.
Speaker B:I don't like it because of all the reasons I've expressed on past shows.
Speaker B:And which gets to the heart of the question that A and M is asking, which is, does the consumer really need this inside of a Chat GPT experience or some other LLM experience?
Speaker B:I don't think so.
Speaker B:You could ultimately do that in the Starbucks app.
Speaker B:So I don't get why the traffic is necessarily gonna go here to do this.
Speaker B:So it begs the question, me, why, why now?
Speaker B:Why do you need to do this?
Speaker B:It's not make or break for you, Starbucks, at this point in time, why be the first penguin in the water?
Speaker B:That's the reason.
Speaker B:I don't like it.
Speaker A:Interesting interest.
Speaker A:I mean, look, in principle, I don't.
Speaker A:I don't disagree.
Speaker A:Yeah, I don't entirely agree.
Speaker A:I mean.
Speaker B:Yeah, no, it's fine.
Speaker B:I don't know what I think anymore.
Speaker A:Look, I mean, look at the bear numbers.
Speaker A:There's 800 million people on ChatGPT every week.
Speaker A:Right.
Speaker A:So it's really hard to walk away from that.
Speaker A:Levels of eyeballs, that level of traffic.
Speaker A:And Agent E Commerce, we've already hit one of the really big talking points in our industry.
Speaker A:Agent E Commerce is another one.
Speaker B:Yeah.
Speaker A:And what became super clear in Vegas is we don't know what the end game is going to be.
Speaker A:Nobody knows what the end game is.
Speaker A:One thing that became really clear, though, is you can't risk not being part of the conversation and not trying things because one of these solutions might suddenly be the one that works.
Speaker A:And if you stepped out of that conversation, you're playing catch up on the speed at which he's moving.
Speaker A:So there is that.
Speaker A:That jeopardy.
Speaker A:Having said that, okay.
Speaker B:All right.
Speaker B:There's always a but.
Speaker B:There's always a but.
Speaker A:The but is I don't love the in app approach either.
Speaker B:You don't?
Speaker A:Personally, I think there is too much friction for this to be the end game.
Speaker A:It doesn't feel like this is where things are going to end up.
Speaker A:I'm not going to get in the weeds on Starbucks actual application.
Speaker A:I think everybody needs to test things at the moment if anybody wants to see it.
Speaker A:Scott Wingo's done a great video on his LinkedIn.
Speaker A:He goes through it.
Speaker A:He shows you.
Speaker A:Shows you what it is.
Speaker A:He gives it two out of ten.
Speaker B:Two out of ten.
Speaker A:Two out of 10.
Speaker A:And we know how good the Starbucks digital experience.
Speaker B:Yes.
Speaker A:So look, have a look at that.
Speaker A:If you want to get in the weeds on the actual tool.
Speaker A:Yeah.
Speaker A:As a direction of travel.
Speaker A:I think every brands have got to understand how they show up in a gentic commerce in apps.
Speaker A:I'm not there on yet.
Speaker B:Yeah, see I get the whole thing about like you need to experiment, you need to show up.
Speaker B:But do you, do you really like, do you need to do it right now?
Speaker B:Because like, you know, like the other point I bring up like I can remember just even a few years ago, like with TikTok, people were complaining about how TikTok was inspiring all these crazy drink formulations that people were bringing into the stores and it was causing the baristas headaches.
Speaker B:So like if you think about this and you're like, oh, I make, I'm experimenting with this and it works, that's you're gonna have that problem exponentially and you don't want that.
Speaker B:So I don't really get what the end game here is in the experimentation other than to say, oh, we're experimenting.
Speaker A:And that really leads.
Speaker A:There's a couple of things that I issues I've got with this and okay, it's beta, that's fine.
Speaker A:Number one, the merchant in me is still worried about how ruthless Bryan Nichols and the team are being with the range rationalization at Starbucks.
Speaker A:One of the problems, one of the issues that caused the operational challenges that Starbucks are having particularly in the US is that it overranged.
Speaker A:The range was far too great.
Speaker A:If you go on the Starbucks website, it says this new ChatGPT app and I'm going to quote, here is a new way to discover your next favorite drink.
Speaker B:Starbucks.
Speaker A:You've got to take a step back, right.
Speaker A:You're a coffee shop.
Speaker A:You shouldn't need a ginger commerce to help people understand what your products that you sell.
Speaker A:If that's the case, you've over complicated it and that just creates those operational pressures.
Speaker B:Mic drop.
Speaker B:Yeah.
Speaker B:I wouldn't be surprised if this gets killed sooner rather than later.
Speaker B:I really wouldn't.
Speaker B:But mark it down.
Speaker B:We'll see if I'm right, see if I'm wrong.