What have the past 12 months done for digitally-enabled products? Accelerated their portfolios by seven years, according to a McKinsey Global Survey of executives.
Never before has there been this quick of a digital transformation effort to modernize business processes, supply chains and workflows like we saw over the past year. And digital business is still evolving.
While the workplace saw large-scale adoption of remote work, brands saw huge shifts in customer behavior that had all organizations playing catch-up. According to a Harris Poll report released March 15, The Great Awakening: A Year in the Life in the Pandemic, eight in 10 American consumers plan to shop online in some fashion, even when the COVID-19 global pandemic comes to an end. Further, 64% of shoppers say they plan to continue to use less cash, and (48%) don't want to touch cash anymore.
All of these findings point to continued digital transformation as a bottom-line impact on business processes and brand strategy. The good news is we caught up for this latest edition of the CX Decoded podcast with an executive who already lived this kind of digital transformation — Adam Brotman, former chief digital officer at Starbucks. Brotman is now the CEO of startup Brightloom, a customer growth platform. Brotman is a long-time technology innovator who is passionate about helping brands build meaningful and long-lasting relationships with their customers.
Brotman in this latest CX Decoded Podcast with CMSWire's Rich Hein and Dom Nicastro shares challenges and strategies behind Starbucks' digital transformation of the 2010s and how his current customers at Brightloom have had to digitally adapt.
Editor's note: The following is an edited transcript of the Adam Brotman CX Decoded podcast.
Rich Hein: Adam, welcome to the show. Could you just start off by telling us a little about your role as CEO of Brightloom?
Adam Brotman: I'm excited to tell you about my role as CEO of Brightloom. Brightloom has been around for all intents and purposes for about a year and a half. We were sort of born into this pandemic. Before the pandemic, October-November of 2019, I was brought on board just before that through the combination of Starbucks and some venture capitalists that had been working with a company called Eatza. They asked if I would be willing to join the company, help rebrand it and bring literally and figuratively the Starbucks digital flywheel products and thinking into this new business plan and lead it to build and offer those services to other businesses.
And of course I was very excited to do that. I'd been at Starbucks for about nine years. I was at J.Crew in New York as co-CEO and president and chief experience officer, and I was really humbled and excited about the opportunity to take all the great things that we learned and did at Starbucks and productize them, if you will, democratize them and bring them to market.
So we decided to focus at Brightloom on what we think is the most exciting and most difficult challenge in digital transformation today, which is how do you use your data to propel your business and improve your customer experience? It's something that's super difficult. And to date, only billion-dollar-plus brands, typically, are the kind of brands that can afford to have teams to tackle this challenge.
And so we've decided to take this idea of data-science-as-a-service or software-as-a-service for personalization using data as the primary product, and that's Brightloom does.
Rich Hein: When most people hear digital transformation, it sounds like a buzzword. Could you talk a little bit about what digital transformation looked like for your customers throughout the last year and what unique challenges they had to face throughout the pandemic?
Adam Brotman: I love that you said McKinsey said it's been about seven years worth of digital acceleration that's occurred in the last year, and I absolutely can tell you that that's what it feels like to me witnessing what our customers are going through. They're seeing their percentage of transactions, and just overall interactions with their customers, going from maybe 10% to 20% digital to in many times 40-50-60% digital. So you're seeing this 300 to 400% increase in the percentage of their digital interactions and transactions.
And what that means is that digital has now become the primary way for customers to interact with the brands they love and vice versa. Digital is not just important and growing: it's become the primary, most important way for you to think about interacting with your customers. And I'm not being hyperbolic.
Dom Nicastro: Tell us a little bit about the digital transformation that Starbucks made, your role in it, and kind of the lessons you apply and still use today.
Adam Brotman: When I started at Starbucks, the very beginning of 2009, we knew that we wanted to embark on a big digital transformation. We knew that that would be important to us. It's why I was brought on to the company.
Howard Schultz, and subsequently Kevin Johnson, the current CEO, both of them had a clear sense throughout their journey that digital was going to be important. And, it was just a matter of figuring out what was the vision for the digital transformation, what would be the priority, how are we going to affect that kind of change in such a big organization?
And one of the things that we did that I am really proud of, and I think it's really interesting, is we recognized that before you tackle the strategy or even the tactics and the technology, you first have to think about organizational design and meaning. Who in your organization is going to be even responsible for digital transformation? It's really a cross-functional effort. Is it marketing? Is it the strategy group? Is it the head of technology?
I remember there was no such thing really as a chief digital officer or a digital role other than maybe digital marketing, for example. So, one of the things that we did at Starbucks that I think was really helpful is about two and a half years after I got there I was promoted to be chief digital officer. There was no such thing at the time. In fact, I remember Googling it, and feeling almost embarrassed because it was like a made-up title. Am I really going to tell my parents and my friends, this is my title because they're going to think I'm just coming up with some funky title.
But what it signaled was that we were going to take certain elements, like marketing and analytics, and certain elements of technology, and we're going to put them all together in this digital group that we call Digital Ventures, which was under my chief digital officer team. It was going to be a cross-functional effort but it's going to ladder up to something that's bigger and more important than just the individual parts.
We focused on the idea that we wanted to enhance and strengthen and build digital relationships with customers. And to this day, when we talk about digital transformation, I use words like "love" and "relationships" and "emotions," because that is at the heart of it. What you're trying to do in digital is you're trying to win the heart of your customers and have them love you and have a stronger relationship and connection to you. And digital is an incredible way to do that because you can provide them rewards and convenience and seamlessness and personalization and all these things that just make you feel as a customer that you're just dialed in. And it ends up being a very emotional response.
Dom Nicastro: Technology is great, but the skill sets might not be there to deliver these customer experiences. With Starbucks, what were some of those initial challenges from a structural and organizational kind of people standpoint?
Adam Brotman: One of the first things we realized that we needed to develop was a digital product group. We're about coffee and snacks. We're not about technology. We had great technology partners and leaders. But when it came to digital we realized, well we have technologists in the company.
Curt Garner, who's now at Chipotle, was our CIO. Stephen Gillette was the CIO that helped bring me into the company and so the technologies that were there were great. But this wasn't really just a technology issue, this was a technology and user experience and strategy combined question. So we realized that the first thing we need to do is create a digital product group.
Now most technology companies, they will have a product function. A product function means you're going to think about what are you going to build and why, and what is it going to look like. What's the design of it going to be? What are the features going to be? And then you turn to your partners and your technology group and they go build the thing that the product group decides.
That's not a natural thing for a retailer to have. Retailers have product people in coffee and beverages and snacks. And so if you think about any consumer brand, you're probably going to find yourself thinking I don't have a product team. We have a product team for my core product but not for my technology. I have a technology team. I've got my food team, or my clothing designers or whatever product you're making, but you don't typically have a product team.
So that was the first thing we realized is that like a great Silicon Valley technology company, we need to build a product team. So we built a product team under my chief digital officer group, and of course that went along with our loyalty team and our payments team, a technology team, we had digital marketing, we had analytics. But we didn't have a digital product so that was a big thing we needed to put in place.