Starbucks & Straws: The Unexpected Uses of Location Data
Eliminating straws is a win for both the environment and Starbucks, writes Skyhook CEO Craig Waggy.
Starbucks recently announced their plan to eliminate plastic straws in all of their stores by 2020. Given that more than 50 percent of Starbucks’ beverages currently sold in the U.S. are cold ones, this decision will have a big impact on both the environment and consumer’s goodwill towards the brand. Just how big of an impact? That’s what we were curious to find out using location data and insights.
Starbucks currently estimates that they will eliminate 1 billion straws a year worldwide after the ban is fully in place. While this seems like a large number already, by using Wi-Fi confirmed venues data and mobile activity metrics, companies could estimate that the total number of straws eliminated may actually be almost double that number in one year alone.
Companies and their agencies leveraging location data and insights to analyze both foot traffic patterns as well as venue density and local behavior activity can see patterns across a full chain. In the case of straw usage, Starbucks can disaggregate reported totals across their entire 28,000 store chain down to ground-level detail relevant to individual store locations. By analyzing proximal traffic and distribution numbers by individual store, Starbucks can glean more in-depth perspective into how much revenue they are generating or how many straws are ending up in the wastestream.
Where will straw elimination have the biggest impact?
Location data can also help brands identify trends in foot traffic and revenue generated by region or country. This insight can help determine which geographic regions are ripe for expansion and areas where brands need to dial back their presence. In Starbucks’ case, they are currently making a big push towards expansion specifically in China in the next five years.
Wi-Fi signal detection methods can be used to identify that Starbucks locations are rapidly opening in Shanghai. When it comes to plastic waste, China also happens to be the country that is currently polluting the ocean the most. As Starbucks continues to expand in the country, the fact that they are already addressing plastic waste elimination is a big win with consumers there.
Aligning with a cause equals a win with consumers
While the main headline from Starbucks’ announcement was the elimination of straws, the brand is making a larger overall push towards sustainability innovations. This move is smart from both an ecological standpoint and a PR perspective. The brand’s decision to tout their sustainability efforts publicly has helped endear them to many consumers who share the view that sustainability efforts are important and should be made more of a priority.
Research has shown that consumers tend to support brands that share their beliefs and views. Younger consumers in particular are more than 50 percent likely to care about what a brand says and does and decide where to shop accordingly. From an advertising standpoint, targeting those consumers with messaging focusing on shared beliefs could result in increased ROI.
Location data and intelligence can be used to identify shifts in consumer behavior in the real world. Location intelligence derived from location data can help brands identify trends in the types of customers who are shopping with them on a regular basis and what they care about and where they go in the real world.
In Starbucks’ case, we predict they will see more customers who are environmentally conscious. Starbucks can also use location intelligence to learn more about what other causes those consumers care about, which they could then use to align themselves with in the future.
Any brand can benefit from this analysis
As Starbucks gains traction with the news that they are eliminating plastic straws, many other brands are debating whether or not to join the cause. Location data and insights can be used to help brands analyze impacts locally, regionally, nationally or globally. Customer behavior can also be investigated at multiple scales to gain deeper understanding of whether or not current customers or target consumers would support changes such as elimination of plastic straws.
As environmental issues become more of a priority for consumers, brands aligning themselves with those beliefs and causes gain an advantage in winning consumer loyalty at a time when that is harder than ever to come by.
*Craig Waggy is CEO of Skyhook. He joined TruePosition, Skyhook’s parent company, in 2005, serving as the Executive Vice President of Finance and Administration from 2005 to early 2014 and subsequently as Chief Executive Officer. Craig’s role was expanded in early 2016 to include the Chief Executive Officer position at Skyhook.
Craig has over twenty years of experience serving technology companies. Prior to joining TruePosition, he served as Senior Vice President and Chief Financial Officer of OpenTV Corp. (Nasdaq: OPTV) and Liberty Broadband Interactive Television. He previously held the position of Senior Vice President and Chief Financial Officer at TV Guide, Inc. (formerly United Video Satellite Group) (Nasdaq: TVGIA/UVSGA, prior to its acquisition by Gemstar-TV Guide International, Inc.)