In Terms Of Brand Experience, Digital Is The Fourth Place: Starbucks’ Sushant Dash

In India, while tea holds the title of the nation's typical beverage, coffee is revered as an experiential indulgence. Tata Starbucks has wisely stuck to this cultural distinction by infusing its global identity with local nuances, a strategy that resonates in a country as diverse as India.

Recently, marking an important achievement, the brand celebrated the inauguration of its 400th store in Pudur, Coimbatore, nestled within the historic Lakshmi Mills compound. This milestone underscores Tata Starbucks' steadfast commitment to expanding its footprint across varied markets, as it ambitiously aims to reach a staggering 1000 stores by 2028.

Since its inception into the Indian market in 2012, Tata Starbucks has embarked on a remarkable trajectory, spanning over 60 cities. Spearheading the introduction of a vibrant coffee culture in a nation steeped in tea traditions, the brand has redefined the coffee-drinking experience. By fostering meaningful connections over coffee, Tata Starbucks has successfully captivated both seasoned coffee aficionados and newcomers alike. Moreover, by crafting offerings tailored to local palates, such as filter coffee, Masala Chai, Malabar egg puff, and Kosha Mangsho Wrap, the international coffee giant seamlessly integrates with the intricate tapestry of Indian culture.

BW Marketing World spoke to Sushant Dash, CEO, Tata Starbucks India who spilt the beans (quite literally) about aligning the brand’s overall marketing strategy with its brand values, online being the fourth place for selling experiences to its customers, its strategy for raking in new customers, brand collaborations and more.

Edited excerpts:

What kind of an approach do you plan to utilise in your overall marketing strategy when it comes to reaching out through traditional marketing and digital marketing, specifically?

The Starbucks marketing strategy is tailored to deliver the premium Starbucks Experience to consumers. Social and digital platforms comprise a large base of where our communication is targeted, keeping in mind that this is where our consumers are present today, in addition to mediums like PR, print media, OOH and in-store displays. We also have the Starbucks Rewards loyalty program that is curated to offer exclusive benefits to consumers along with an easy ordering experience

How does Starbucks ensure that the overall marketing strategy aligns with the brand's values and resonates with the Indian audience?

For us, at the end of the day, it is about creating an experience. Everything that we do, is about ensuring that there is warmth, there is connection every time we do any activity, whether it be a sponsorship, be it a marketing activity.

If you look at it, the last big campaign that we did - ‘It Starts With Your Name’ - was to say that at Starbucks we were not trying to sell a product. We were trying to sell the experience, the warmth, the connection that in our place when you come in, it begins with your name. You are not just a number for me. You are not just about a drink for me. You are a human being. And I am trying to make that connection with you in terms of what I do.

So that is something that we keep in mind in every element that we do. Be it in terms of, for example, many of the promotional tie-ups that we do, be it the Disney merchandise collection that we did. Again, the idea of that tie-up was because with the Disney characters, there is a certain vibe, a certain warmth that they bring to the table. There is nostalgia that people experience when they look at the Disney characters and a tie-up with a brand like that.

Similarly, when we did the campaign over December - for us, Archie's is all about capturing the essence of friendship and togetherness. And that is what they have always been. Hence, it brought our brand message and what Archie’s stands for closer to each other.

So those are very important things for us to keep in mind. The association with Sabyasachi was a tie-up that we did last year for our merchandise. One of the reasons was obviously to bring in an Indian designer, and that created empathy and localised what we bring to the table. It was in some ways, close to our heart because the collaboration supported the cause of educating girls. And we have, as a brand, gone out and said that that is a very critical part of what we do in India.

40 per cent gender diversity, which is the highest in the category – and we have been rated the best workplace for women to work in. So that, again, connected in terms of what we as a brand stand for.

Everything that we do, if you look at it in terms of the store experience, what we do at the store, is in terms of furthering our story of connection, warmth and coffee.

In the age of digital marketing, how does Starbucks focus on online consumer experiences to maintain brand authenticity?

In terms of the offline space, apart from innovation in the store decor and the connection, and both in terms of food and beverage, we provide a good mix of Indian and international. In terms of experiences, our idea is that we call the store the third place.

We now know that digital is the fourth place. So life for most consumers has moved beyond the office, home and a physical place like Starbucks - to spending time in the fourth place, which is digital. So, in terms of an online experience, we try to offer the same brand essence, in terms of creating the same connection, the same warmth, trying to create the same kind of messaging, making it more convenient.

We have done multiple things in terms of our online presence. Firstly, we are available for delivery. We did a lot of innovation because delivery, intuitively, if you look at it, people had concerns in terms of, unlike food, whether a drink will reach them with the right kind of integrity. The temperature might go away or the steam might go away and it could become flat. So we worked a lot on the packaging of how to deliver it in the right manner so that the experience that they get in the store is the same experience they get when they order it. That was the first work we did before we went online.

Secondly, we have worked a lot on our app. So if you look at it, it is very personalised. It greets you on a one-on-one basis. We use AI and ChatGPT to give you personalised messages to look at what your preferences are - talk to you about that, like while you are in the store, you get the barista to recommend to you what is happening. We try to create the same experience through our app.

We have mobile order and pay, wherein you can pre-order, pay online through the app and just pick up your drink so you don't need to queue up or wait. You can do it on your way to the store. We now have WhatsApp, ordering and enlisting into our rewards program, thereby making it much easier. It’s just the scan, order, pay solution kind of thing. So it is a quick registration for our customers - they don't need to fill up any forms or wait.

Also, one of the things we realised as we grow and we open stores across many parts of the country, is that there are still areas where people want to participate in the Starbucks brand, but don't have a physical Starbucks store around. So we have tied up with e-commerce platforms such as Tata CLiQ, and Flipkart and for merchandise sale too.

How are you looking at gathering new and repeat consumers? How is your marketing strategy designed to make this happen?

For us, it is not just about like being in a penetrated category. In FMCG, many times it is about gaining new customers from other brands. People are already participating in the category. In our case, it is more about creating the category.

Today, people don't drink coffee. A lot of them are not aware of what are the different kinds of coffee. So it is about creating the category and getting new consumers, not just into our brand, but into the category.

To do that, we realised that some of the things that we needed to do was to understand why people come to the stores, and why they come to a cafe. And what is it that we can do better in terms of a product offering to get new consumers, be it in terms of the ambience, the product, or the food.

When we asked consumers as to what would make them to come to a Starbucks store. So a couple of things that we heard from our consumers on the food was that most of our food is quite big. And if they go to a Starbucks between meals for a cup of coffee, they want something smaller, which is more bite-sized because they don't want to eat a large sandwich or a large pastry because it fills them up, and then it spoils their appetite for lunch or dinner. So we introduced a range of bite-sized items which are much smaller in size, which you can have with your cup of coffee in between meals.

Second, for example, the consumer came back and told us that in India, if we go out, we go out with our friends, we go out with colleagues. And when we do that, we want to share things. Most of the items in our stores are not shareable. And that is a very typical Indian thing - that we like to share our food also. And when we go together, we'll order two or three dishes and all friends or colleagues will share. So we introduced a range of shareable items.

The third thing that we heard from our consumers many a time, is that even in the office amongst a group of colleagues, or a group of friends - there are maybe a couple of them who don't drink coffee. And then you will choose a place where even tea is available. So we introduced various flavours of tea last year. We will always be about coffee, but we don't want to lose out on these groups. We also want to create familiarity so that people feel comfortable to come to a Starbucks for tea and even filtered coffee which is equivalent to the South of the masala chai, so that the groups can flow in and there is comfort.

Another instance would be that quite a few times we realised when we observed that men or women came to our stores as individuals, from offices, colleges etc. - but as a family unit over the weekend, we didn't see too many of them come to the store. When asked about this behaviour, we realised that one of the deterrents, as Indians, was that they don't serve tea or coffee to kids, usually up to a certain age, probably between 10 and 14 years of age, depending on the household, because they think that it is an adult drink. People who have young kids would want to go to a place where there are non-caffeinated drinks available. So we launched milkshakes. And that has created another occasion for families to come.

One of the other instances is that of the launch of the small-size Picco. We, as Indians, don't drink large quantities of liquid; even at home, the amount of tea that I drink is a much smaller size - about 80ml to 100ml. That is what we are used to drinking. Many people told us that they love Starbucks drinks, but the quantities that we give are too much and sometimes it fills them up. So we launched a smaller size that brings a lot more comfort, that brings in a new set of consumers, a new occasion for people to come in, which is the Picco size.

It is broadly about localising taste preferences. We have bought a lot more of regional food. Every region has a different speciality. So we have made food which is regional, and local to attract consumers. And then we have the global favourites as well.

So innovation in food, and drinks, very specific insight gathering in terms of how we can get new consumers, how we can make them more comfortable in our stores, and then doing things to ensure that we are creating more occasions – has helped us build on new and repeat customers.

Starbucks often ties up with movies for promotional campaigns, and also with influencers and local artists. How do these partnerships enhance the overall marketing and consumer engagement for the brand?

It is about another way of engaging with the consumer, connecting with them – these are what our new Gen Z consumers associate with. It gives them another way of committing to, or in some ways connecting with the brand because of our tie-up with brands such as Disney, and BlackPink, because you need to be relevant to different sets.

So Disney makes it more nostalgic. It is a warm, fuzzy feeling, while something like a BlackPink is more for Gen Z, where they associate more with the brand, with the band, and hence in terms of the merchandise that you bring to the table.  Archie's, again, was about celebrating friendship, which is about the gang, and that feeling of creating that occasion - and we collaborated with the movie depicting that when you get together, it is about festivity. So there was the right kind of tie-up then.

So it depends on the occasion, it depends on the target segment that you are looking at. It depends also on the values that the collaborator or that other brand has and our brand in terms of the overlap. Most importantly, it is about giving another occasion or another chance to engage and connect with our consumers beyond what they would do regularly when they come and have a coffee or food.

What role does technology play in enhancing the Starbucks customer experience, both in-store and through its app in India?

Given the current phase of business in India, there is a strong focus on creating newer digital products that will drive business. For example, we recently launched a subscription product where customers can buy bundles and drinks in advance at a competitive price as per their drinking patterns. The drinks are credited to the customer’s loyalty account and the drinks can be redeemed within a defined period. Another example is the use of advanced customer segmentation and omnichannel campaign management. Leveraging customer segmentation, we have developed a stronger understanding of customer behaviour and created campaigns and offers for them. Customer segmentation can also be used to personalize messaging on our mobile app, showcase product favourites create more stickiness for customers and further drive the business.

Starbucks collaborated with Manish Malhotra for a limited-edition lifestyle drinkware range. Is Starbucks planning to enhance its presence in the Indian market with other collaborations or partnerships?

In the past, Starbucks has globally partnered with key franchises including Disney and BlackPink to bring exclusive merchandise to the consumers. Through the partnerships, we have brought the consumers, something to cherish which in return has helped us reach a wider audience base. The collaboration with Manish Malhotra was rooted in elevating everyday moments of the coffee-drinking experience, tailored to consumers and through the lens of the ace couturier’s signature craftsmanship. We wanted to offer an unparalleled experience for coffee, art, design and fashion enthusiasts that would bring together the uniqueness of both brands. As a brand, Starbucks is deeply intertwined with pop culture, and we are committed to enhancing coffee experiences for our Gen Z and millennial customers through strategic partnerships. We actively seek opportunities to integrate relevant pop culture moments into our offerings, and we will surely share our upcoming launches with you as we continue to innovate in this space.

According to you, what trends are expected to disrupt this category in 2024?

India's coffee culture has seen significant growth in the past decade, thanks to younger consumers embracing the café culture and increased exposure to global coffee varieties through travel. In 2024, there will be a growing demand for artisanal and premium coffee reflecting customers' desire for high-quality brews.

Coffee has now evolved beyond its functional benefits, inspiring a vibrant coffee culture and growing coffee enthusiasts who appreciate the nuances of taste and aroma. We believe that the everyday ritual of coffee is a powerful way to connect with yourself and with others. As such, we will continue to elevate our signature Starbucks Experience in our mission to nurture the limitless possibilities of human connection.  

Increasingly, consumers now care a lot about sustainability and innovation from brands that they love. Tata Starbucks is promoting sustainability with compostable straws, and wooden cutlery on request, eliminating single-use plastic, shifting to recyclable packaging, investing in innovative agricultural practices, reforestation, water conservation, and improved waste management. Globally, we aim to achieve carbon-neutral green coffee and conserve water usage in green coffee processing by 50 per cent, by 2030.