Starbucks CEO Says Retailers Competing on National, Not Local Scale

Matt Shelly
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Starbucks CEO Howard Schultz recently noted that electronic commerce has radically changed the landscape of the retail market. The Starbucks CEO statement included the thought that businesses are no longer competing on a local scale and suggested that retail companies now face competition on a national level. The massive coffee chain seems prepared for the reality posed in the Starbucks CEO statement. The company has taken great strides to modernize its business, and it now accepts a large number of mobile orders and payments and issues digital gift cards online.

The truth of the Starbucks CEO statement is likely apparent to savvy retail experts. The market has definitely experienced a major shift toward online ordering in recent decades. Products ranging from apparel and electronics to packaged foods and even fresh local delivery items such as pizza and flowers are available with online ordering. National retail chains, like Starbucks, are poised to do excellent business by moving many of their operations online and focusing on local delivery and fulfillment. The coffee chain is so popular that there is even a private Starbucks location inside the NBC press area at the Sochi 2014 Olympics—despite the company not being a sponsor of the event. Its shift to online marketing and ordering is a major part of its worldwide appeal.

Smaller retail operations can glean much insight from the Starbucks CEO statement. National retail chains are not the only ones that can benefit from online ordering. Local companies that make their inventory available online and allow for quick mobile or Internet sales may gain an edge over their competition. Retail stores that traditionally deliver their goods may score additional sales by offering in-store pickup, and outlets with an online presence can more easily create a fulfillment system that will allow them to reach customers across the country. Fulfillment systems help ensure quick and timely delivery of goods—even when the person ordering them is on the other side of the nation.

The Starbucks CEO statement also brought to light the fact that the company does quite a bit of business through its mobile application. The cost to create a mobile app for smartphones may not be as high as many expect, and companies like Starbucks process upwards of five million transactions every week using the app. This means that a smaller retail business may benefit from investment in an app and payment service that makes it easier than ever for customers to buy without coming into the store.

The world of retail has definitely changed in the past few decades, and the seismic shift indicated by the Starbucks CEO statement is reality for many modern businesses. Keeping up with this change can help put your company ahead of competitors in the market and allow it to compete on a national level.



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