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Starbucks plots five-year marketing charge to exploit “seismic shift” in consumer behaviour

Starbucks has outlined a five-year marketing strategy to exploit the “seismic shift” in consumer behaviour toward purchasing coffee and tea as it looks to almost double revenues to $30bn by 2019.

The coffee retailer says the plan will “maintain the entrepreneurial DNA of the company” but lean into a “transformative moment” of growth across its coffee, tea and retail offerings.

Customer experience, coffee leadership, expanding the retail footprint and growing the brand in supermarkets are Starbucks’ priorities over the next five years alongside creating new reasons to visit stores, digital and building the Teavana tea brand it acquired in 2012.

Key to the 2019 sales target is Starbucks' food and mobile products. The company expects continued “top and bottom-line growth” from its growing of savoury, locally relevant foods around the world.

Meanwhile, mobile payments are being used as a way to boost footfall into stores, which in 2015 will primarily be driven through its new “Mobile Pay & order” app. The app, which launches in the US first before other markets, lets customers order beverages and food from their smartphones in advance of picking them up from stores.

The service aims to bolster preference with the company’s affluent young professionals target group. Starbucks’ products are positioned as premium compared to other high street coffee chains with its latest mobile app viewed internally as the “top” new “traffic-driving initiatives”.

The retailer’s five-year plan reflects business, operations and growth trajectories worldwide that “have never been stronger”, Starbucks claimed, with more customers visiting more stores more frequently. Its 2019 target marks the latest phase of a growth plan that was dealt a slight knock in the most recent quarter when sales fell short of analysts’ forecasts. Despite a 5 per cent year-on-year jump, it was slowed by higher coffee prices stunting demand.

Howard Schultz, CEO of Starbucks, said: “The rules of engagement for a public company have changed. Companies now must do more for their people and the communities they serve.

“The seismic shift in consumer behaviour underway presents tremendous opportunity for businesses the world over that are prepared and positioned to seize it.”

The coffee chain is centring its global efforts on China and the Asia-Pacific regions it claims represents “enormous, immediate, high-value opportunities”. It is to double its store count in China to over 3,000 stores by 2019, and plans to ramp up growth in Japan after it bought out its Japanese partner earlier this year to take full control of its operations in its second largest market.

Troy Alstead, chief operating officer at Starbucks, said: “We expect both the number of customers visiting our stores and the amount they spend with us to accelerate in the years ahead. With a robust pipeline of mobile commerce innovations that will drive transactions and unprecedented speed of service, Starbucks is ushering in a new era of customer convenience. We believe the runway of opportunity for Starbucks inside and outside of our stores is both vast and unmatched by any other retailer on the planet.”

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