Deepa Krishnan, Director – Marketing, category, loyalty and digital at Tata Starbucks, speaks to WARC’s Biprorshee Das for the Marketer’s Toolkit 2022 about how the coffee chain connected with its customers in the digital space during the pandemic.
This interview is part of WARC's Marketer's Toolkit 2022. Read more.
- COVID has made customers crave for more experiences while seeking more transparency and honesty from brands.
- Consumers are looking for a sense of meaning and purpose in their lives and that also transcends to all their interactions.
- A strong brand will prevail across formats and only being slow to adopt digital practices will prevent it from doing well.
How are you adjusting to a start/stop economy with the constant threat of rolling lockdowns?
There was no rulebook for anything like this. The wonderful thing we did was that we went back to fundamentals and ensured that every connection we had with customers was fantastic. All of our employees are called “partners” and we asked what we can do for them, how we can provide them with a safe and secure work environment and financial assistance to tide over COVID. We asked what we could do to connect with our customers, how we could be more omnichannel for them, for many of whose days are incomplete without Starbucks. Interestingly, when we did all of these, we were very well-prepared when things opened up.
We also used the time last year to make sure that our expansion plans remained as robust as ever. In fact, we had one of the highest store openings last year, despite COVID.
We used all this time to innovate, go back to fundamentals, make sure our people and customers are taken care of, and not take the foot off the pedal for our expansion plans.
You mentioned that the expansion plans were in place despite the pandemic. We sense optimism and confidence.
It goes back to whether you have a long-term vision for your business or if you are going to look at it in the context of three or six months. The success and resilience of an organisation depend on how it bounces back from a setback.
When the pandemic hit us, we had our partners waiting to go back to the store because they knew that their regulars were missing them. That is the level of commitment and passion we have.
The reason Starbucks is such an iconic brand is because the people who work here truly believe that they are making a difference to the lives of so many around them.
It was very heartening to see that our partners were willing to travel and return to work because they also knew that we would take care of them. We didn’t have any job losses, no salary cuts – we were very clear that we first needed to take care of our people.
Are you seeing any evidence that COVID has changed customer perceptions or sensitivities around advertising? How have you had to change your communication tone and style?
Customers now want a greater degree of transparency and honesty from brands. They also want to know a little bit about heritage and origin. They are craving for more experiences.
The lockdown gave customers a lot of time to introspect, to really identify what is important for them. I also believe that there will be a change where customers will question materialism versus experience even more than they have done earlier.
For us, it worked very well for what our brand stands for. We have always been that third place where the customers can connect outside home and office. We have been a place where individuals are seen as what they are. We take the effort of calling the person’s name, writing customers’ names on the cup and making them feel comfortable. We also want to be a brand that is very rooted in a sense of purpose. We do a lot of work with respect to sustainability, community and environment.
So I don’t think we have had to change track honestly. We are just being who we are and we continue to say what we want to in an authentic manner.
Are you saying the ways you engage with your customers are still very much the same? Because we've also seen how traffic has significantly moved to online channels.
In terms of the way we do business, in addition to being the third place, we have also become the fourth one. We have launched a mobile order service, for instance, wherein you can pre-order a beverage so you don’t have to wait inside. We have launched contactless deliveries. Those ways of doing business have certainly changed and they are here to stay.
The omnichannel way of doing business will certainly be a trend and be there going forward.
In the way we connect with our customers, it was a challenge for a brand like ours that forms a sense of connection when the customer comes to the store. And there was a period when the country was shut last year – how could we have kept that connection alive? That did change for us.
We then took our offline ritual online. We sent over 2,500 notes, direct messaging our customers, calling out their names with their favourite beverages, wishing them on special days, birthdays. That’s how we kept the connection alive in a very tough time.
Yes, things have changed. They have changed on-ground in the way one does business and also in the way one connects with customers on social media and beyond.
It’s a two-way street, isn’t it? It isn’t just your customers who are changing their perspectives but also marketers like you who are constantly learning and adapting to things around you.
For a lot of brands that have not been as digitally forward as we are and who had a lot of communication on television, print and radio, the learning curve has been steeper.
In our case, we have always been a brand that communicates with our customers first to digital because a lot of our customers are millennials and they live in the digital space. So we have been used to the fact that communication always will have to be two-way. That helped us adapt a little faster than other traditional companies.
Has your thinking around new product development and launching new brands changed following COVID? Do you see a trend towards new brands breaking through more frequently and any new trends in brand positioning as a result?
One thing that has definitely happened is that loyalty is on the rise after COVID. Customers want to go back to the familiar, they want to go back to things they understand. They are far more questioning, they want to know if the brand they are associating with is giving back to society and is making the world a better place. One thing that COVID has done is make us realise that we cannot be as carefree anymore because we have all become far more vulnerable.
Customers are looking very carefully at brands and the purpose behind them.
I don’t think brands that have positioned themselves on a fad or something that is short-term are going to be very successful in the immediate future. Like I said, customers look for a sense of meaning and purpose in their lives and that is transcending into all of their interactions as well.
Can you share some of Tata Starbucks’ product innovations that happened because of the pandemic?
Some of the innovations that we have seen happened on multiple pillars. The first one is actual consumption. One of the first things we launched is the one-litre beverage and these were cold beverages. So you could enjoy your vanilla lattes, cold brews, Vietnamese cold brews, hibiscus lemonade tea in one-litre packs at home with your family. This whole at-home concept was something we innovated on.
We also started the concept of subscription for people really missing the Starbucks experience.
The other pillar was about going back to the fundamentals on coffee and authenticity and a connection to our roots. We launched a limited-edition Diwali blend of coffee last year. Again, going on the insight that while people may not be able to celebrate festivals by meeting their friends and family but the love and joy a festival brings are unparalleled. So we launched for the first time in India a blend that celebrates a festival. It was also the second such blend in the Asia Pacific region. It was a runaway success because it connected with something that is so integral to the country.
The third pillar we wanted to drive was around warmth. We partnered with (Chef) Sanjeev Kapoor and Tata Sampann and launched a menu of food items that you would not have seen earlier in a Starbucks, for instance, Chhole paneer kulcha, masala chicken croissant, kakori kebab etc.
It has always been important to the brand to add joy to the lives of the customer. So the fourth pillar was that we made sure we were able to add joy and indulgence to the customer experience. We launched ice-creams that were offered in takeaway packs or single scoops with toppings.
Has your e-commerce strategy changed to embrace social commerce? Which platforms/tools are you using?
We are currently present in 19 cities but the brand love is transcending beyond those, so e-commerce is critical for us to get our products out there. We are currently present on Flipkart as well as Tata CLiQ. There will be more to come.
Have you changed your influencer strategy to engage with creators and niche communities?
As we become a brand that goes across many more cities, we are very mindful of the fact that we need to balance our influencer strategy with national-level influencers as well as micro influencers relevant to a city.
Whenever we enter a new city, we make sure that everything from our communication, which straddles social media, print, radio as well as influencers, is really relevant.
We engage a lot with influencers in a city. We call them for our openings. We give them a sneak peek of the store, etc. Beyond that, whenever we have large campaigns, we regularly engage with influencers.
Influencers are a big part of our marketing communication, which works on big campaigns, new product launches and even new store launches.
What changes are you making to your campaign measurement to prepare for a cookie-less world?
Every connection that you drive in the store is going to become important because that will automatically translate into brand love.
It is going to be a combination of ensuring that you futureproof your loyal customers, you ensure every association is strong.
We have a very strong following on social media. It just goes back to how you can engage more meaningfully with things that important to customers.
I talk many times of something that I have learnt in my career called the 99% principle – 99% of the time, customers are not thinking about your product but marketers assume that customers are obsessed with your product.
There is no easy answer to this. All of us are going to be learning as we go along. It is going to force a lot of brands to evaluate what they stand for and make sure that every touch point, be it delivery, in-store etc, is very strong.
Can you tell us a few of your sustainable strategic priorities, be it in product design and manufacture, packaging, recycling old products, etc?
It all goes back to what your founders believed in and what your company stands for. For us, it is very clear that there is no conflict between doing the right thing and the things that are right for the business.
It starts with our coffee. We follow what we call the CAFE Practices, which is coffee and farmer’s equity. Every bit of coffee we procure from across the world is obtained from farms that are following sustainable practices with respect to the environment, where farmers are treated with respect and work under fair conditions and, of course, we only procure the top 3% of Arabica from across the world.
We partner with farmers across the world for agricultural practices, reforestation, water conservation, better waste management, and we do this many times free of cost. Even if we are not buying from a particular farmer, they are welcome to learn from all the progress that we have made.
We believe that if we can help the overall community, everyone will thrive.
In stores, we eliminate single-use plastic. We have moved to all kinds of sustainability initiatives like compostable straws and cutlery and moving to recyclable packaging.
One of the big initiatives was on Gandhi Jayanti and this was done across Asia Pacific, when we gave our customers limited-edition reusable cups. In India, we did this on Oct 2 but in other markets, it was done on Sept 28.
Sustainability is an issue that no company can solve alone. Have you formed any related partnerships, joined industry initiatives, etc?
We are working with the Central Pollution Control Board on a responsibility programme to recycle waste completely. We have also started a zero-waste programme with an NGO.
Another simple example is the coffee grounds, after the coffee is extracted, that we give away to customers for use in gardens.
Starbucks is also committed to the idea of diversity, equity and inclusion. Can you elaborate on your initiatives?
One of the things we announced in 2019 was that we achieved gender pay parity. Currently, we have almost 34% of our working population comprising women and we want to take that to 40% by end of 2022. We are also the only market globally for Starbucks that has all-women-operated stores and one of them launched in Mumbai this month (October 2022), the ninth one in India.
We also have programmes that give women a lot of flexibility. We do believe that it is better if we have more women representation. So it is no surprise that we have always been not just one of the best places to work but one of the best places for women to work.
And I also want to say how men are so critical in ensuring that any diversity and inclusion initiative succeeds. Unless everyone is really married to the concept, it will not work.
Does a strong brand have an advantage in e-commerce?
A strong brand has an advantage, period! What COVID has done is that it has given a boost to everything. India would have taken another three years to reach where it is today as far as digital and e-commerce are concerned, but COVID has given things a spin and it has happened in a year.
But the rules of a brand are going to be the same everywhere. A strong brand will prevail across formats. The only thing that will prevent a strong brand from doing well in digital is being slow to adopt digital practices.
How do you ensure that your brand stands out in a crowded e-commerce environment?
It would go back to the kind of product you offer, the communication you put out with respect to the product. I don’t think there is any separate magic.
The only thing a little different for e-commerce, especially for a brand like ours, is to make sure you are able to form a strong connection with your customer, even in the digital world and through all your e-commerce channels.
The small steps you take can make a difference. It could be as simple as sending out a note. For example, if you order from Starbucks from home, we send handcrafted thank you notes, ask them to be safe as we get their coffee home. These are small examples of how you can make that human connection happen in a digital world. It is going to be a combination of these things.
From your vantage point in the industry, what is your outlook for the year ahead?
Last year was one of extreme stress. With this year, we hopefully are passing through the last stage of the pandemic and we will come out into a much better, happier place.
Some of the things that could probably happen is that while digital will stay, what will come to the fore are connections and experiences. We have seen revenge travelling, for instance. We might see revenge experience and connection-seeking.
I think customers are going to be very watchful and therefore trust is going to become extremely important. They will look at things in a very microscopic way.
The focus on health, hygiene and sanitisation is here to stay.
What are you and the marketing team anticipating in terms of opportunities or challenges in meeting business objectives in 2022? And how are you planning ahead for it?
It is going to be about taking the brand to the next level, scale up to many more cities and ensure that we are able to cascade the brand love to a large part of India.
We will stay completely true to the brand mission – as we expand, we don’t lose touch with any customer. That will be an interesting challenge.
Being relevant in the third and the fourth place is going to be another key area we would work on. We will continue to work with customers and ensure that we are part of their communities with a strong sense of connection. We will become a force to reckon with in the fourth place as well, which is the digital space.
What do you think will be the single biggest issue that marketers from all industries and markets will grapple with in 2022?
Everyone is talking about a V-shaped recovery. That will certainly happen from a consumption point of view but attitudes, mindsets etc will take a longer time to adjust.
Among the focus areas in 2022 and beyond will be omnichannel presence for sure. A lot of companies have recognised the importance of digital and will shift from traditional to digital media. This will mean that the digital space will get far more crowded.