Starbucks Backs Customer Experience Start-Up

July 23, 2019

Coffee chain funds Brightloom to develop new end-to-end customer experience platform for restaurant industry

Channelnomics Staff

If you have a superior experience while out for an evening meal or grabbing a morning cup of coffee, you may have Starbucks to thank for it. The coffee giant is caffeinating Brightloom, a start-up based in San Francisco and Seattle, to develop a new customer experience platform for the restaurant industry.

The Lowdown: Brightloom, formerly Eatsa, is one of a growing number of companies racing into the customer experience management technology segment. Starbucks will license some of its existing technology to Brightloom, as well as take a seat on the company’s board.

The Details: The company will combine its existing customer experience technology with Starbucks’ “Digital Flywheel” software, a platform that enables the strategy for increasing in-store sales through personalization and rewards programs. With Starbucks’ support, Brightloom aims to create a new cloud-based customer experience platform that will enable restaurants to attract and retain customers.

Brightloom and Starbucks plan to offer the new customer experience offerings through Starbucks’ global licensing partners. In time, the company will open the portfolio to third-party restaurants through an independent distribution channel. Starbucks will continue to develop its Digital Flywheel technology as well.

The Impact: Customer experience management is fast becoming a critical component of the go-to-market strategies of B2B and B2C companies. Supply-side vendors recognize that customer experience is essential to retain customers – particularly those consuming products such as cloud services through recurring revenue models.

Background: The investment in Brightloom is part of Starbucks’ ongoing strategy of investing in innovative technology start-ups that support and enhance the value of retailers and restaurants. In March, Starbucks announced the formation of a $100 million fund managed by Valor Equity Partners. Valor is looking to raise another $300 million to augment the Starbucks initiative.

Starbucks’ interest in technology development isn’t surprising given the background of CEO Kevin Johnson, former head of sales at Microsoft and former CEO of Juniper Networks.

The Buzz: “We’re delighted to partner with Brightloom and drive a broad innovation agenda that extends relevant customer experiences from brick-and-mortar to a digital-mobile customer connection,” said Starbucks’ Johnson. “At Starbucks, we have experienced first-hand the power that comes through digital customer connections that are relevant to the customer. The results we’ve seen in customer loyalty and frequency within our digital ecosystem speak for themselves, and we’re excited to apply these innovations toward an industry solution that elevates the customer experience across the restaurant industry.”

Channelnomics Point of View: A coffee chain’s investment in a technology start-up may seem like an outlier event. However, as noted in the related links below, customer experience knows no bounds in the rapidly evolving digital economy. The Starbucks investment and venture fund show that all companies — regardless of their industry — are technology companies and the headwaters of new channels. Additionally, customer experience is rapidly becoming the new metric of success in commercial and consumer channels. Starbucks’ investment in Brightloom is another example of these two trends.