How Starbucks is brew­ing new data driven busi­ness models

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.

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.

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.

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.