Why Starbucks is appointing its first ever CTO

Starbucks is appointing its first ever chief technology officer (CTO), as it ups its focus on technological innovation to drive relevance with consumers.

The coffee brand has appointed Adobe’s former CIO officer Gerri Martin-Flickinger to fill its newly created CTO position. She’ll report directly to the brand’s COO Kevin Johnson.

“As we continue to shape our global technology agenda at Starbucks, we needed leadership talent with deep experience in cloud, big data analytics, mobile and security to take us to the next level,” Johnson says.

The brand’s focus on technology is becoming apparent from recent initiatives including its Mobile Order and Pay app feature, which launched in London last week and allows customers to pre-order products for pick-up. The company was also one of the first to sign up to Apple Pay and partnered with Google to offer WiFi in store.

“Technology is important, ‘even’ for a coffee shop company,” says Mintel’s head of UK food, drink and foodservice research Kiti Soininen.

“Our consumer research shows marked interest in services like smartphone payments, push marketing and pre-ordering among consumers who buy hot drinks out of home, showing that technology can help coffee shop brands to drive engagement and relevance with customers.”

According to 2014 figures by Mintel 36% of out-of-home coffee purchasers are interested in customised offers sent to their smartphones, while 31% show an interest in using smartphone payments at coffee shops.

The rise of technology in FMCG

The technological evolution of FMCG brands that aren’t traditionally linked to technology and online consumers is becoming fairly standard practice, adds Pavel Marceux, Euromonitor’s technology, communications and media specialist.

“In the UK, almost 40% of the advertising market is now online, showcasing how big this development is. The CTO is expected to have a major bearing when it comes to making key decisions around technology and digital marketing,” he says.

As social commerce is expected to grow and brands implement “buy” buttons, the right people need to be hired to get it to take off.

“For brands like Starbucks there are a lot of tie-ins, like apps, online reservation sites and other marketing activity,” he explains.

Lack of knowledge, lack of will

However, most companies still work in siloes with tech and marketing departments running separately. This will have to change, Marceux adds.

“Technology hasn’t been given much importance due to lack of knowledge and reluctance to part with company money, but as we expand into apps and add complicated features like m-payments, we will have to. It’s logical for Starbucks to invest in this now.”

While Starbucks’ direct competitor Costa doesn’t currently have a CTO, other businesses like Coca-Cola, Red Bull and Nestlé do. So should other brands follow suit and start rounding up potential CTO candidates?

It’s a big disadvantage to companies who don’t have that role in place, concludes Marceux.

“Many senior executives of the big conglomerates are old, white and grey men who are well out of touch with technology. These people don’t have the knowledge of foresight to create an extra chair. But they all need a system in place to predict how technology will develop,” he adds.

  • Find out more about technology and digital disruption at this year’s Festival of Marketing, where you can listen to speakers on the “Tech Trailblazers” stage. For more information go to www.festivalofmarketing.com.

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