Coffee Talk: Innovation Insights from Starbucks VP



What can retailers and food industry professionals learn from the man in charge of innovation at Starbucks? Dennis McGrath, the company’s VP of Global Operations Innovation, served up an invigorating blend of insight and storytelling as the keynote speaker at StorePoint Fresh.

The annual StorePoint Fresh conference — held Jan. 22-25 this year in Phoenix, Arizona — gathers senior executives from top supermarkets, convenience stores and food wholesalers to spend some quality networking time with companies that support the industry with innovative products, services and solutions. McGrath shared corporate innovation strategies, and how lessons learned can be helpful to small and mid-sized players, as well as industry giants.

Let’s go right to three key takeaways:

  • The inseparable nature of innovation and risk.
  • How failure = success (transforming knowledge gained from “failed” experiments into new, winning strategies).
  • The incalculable value of having a story to tell, and telling it well.

Innovation and risk: To operate as an innovative company does not mean simply trying something inventive every so often. For innovation to truly pay dividends, it must be emphasized and prioritized by company leadership as part of the organization’s culture. McGrath spoke of how an “innovation ecosystem” at Starbucks provides a solid foundation for the fast creation, testing and rollout of new ideas and products.

He shared an anecdote involving a game-changing mobile ordering and payment app that enables users to easily find their nearest store, browse a menu, place on order, pay for it and arrange for hassle-free pickup. The app moved from planning and development to a test marketing phase within 120 days before being launched throughout North America in under a year.

At Starbucks, the culture of innovation applies not just to products, services and brand messaging, but also to developing new strategies to lower costs, reduce waste and improve execution.

Learning from failure: Amid a perpetual atmosphere of “test, test, test,” the first iteration is often all about failing — gaining in-depth knowledge about what is wrong with the new product or idea.

As an example, McGrath spoke of a Starbucks experiment that involved offering a $1 coffee to compete with less-expensive rivals like McDonald’s. Though the experiment itself came to be regarded as a failure, the evolution of the idea led to a free-refills initiative, leveraged in its popular Starbucks Reward Program, that helped spur food sales. In this case, a negative test turned out to be a breakthrough innovation and an enhanced experience for the Starbucks consumer.

Storytelling: For Starbucks — which famously grew from a single Seattle location into one of the world’s most successful coffee chains with nearly 24,000 stores across the globe — the company’s story has always been closely connected to the customer’s experience.

Corporate values are also a key part of the brand story for Starbucks — a company that prides itself on taking good care of its employees (even calling them “partners”), one that prizes diversity and inclusion, and embraces an ethos of environmental and social responsibility.

StorePoint Delivers ‘Fresh’ Enthusiasm, Ideas

The annual StorePoint Fresh conference proved to be a worthwhile trip for our Rose Displays team — from networking with industry professionals to soaking up fresh insights. The forum provided new ideas on how we can elevate our clients’ bold stories with market-tested products to enhance their vision.

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Innovation has long been part of the company culture at Rose, which holds dozens of U.S. patents on solution-driven signware for in-store visual communications. In recent years, we’ve developed partnerships with leading-edge hardware and software providers so we can combine next-generation technology and graphics while serving as a one-stop shop for our clients’ visual messaging rollouts.

We also help our clients minimize risk as they seek out innovative visual merchandising strategies. Our “walk the store” mentality helps us understand your physical environment and we can lay out a signware heirarchy to maximize customer satisfaction. We make it easy to develop and test custom prototypes, working closely with you to ensure that your program fits seamlessly with store décor.

Helping clients tell their stories has always been at the heart of what we do. Founded in 1980 by Sid Rose (he still works every day at age 96!), the company was acquired at the end of 2016 by Rhode Island-based Visual Creations Inc. — a move that greatly expands our team and our ability to devise innovative visual messaging solutions that engage customers and elevate the retail experience.

Do any of the concepts we’ve talked about here have applications to your business? If you’d like to continue the conversation or exchange ideas about your next project, don’t hesitate to contact us.

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