How Nordstrom and Starbucks Approach Customer Love

We had the pleasure of hosting Ryan Bruels, Director of Engineering at Starbucks, and Jeff Raffo, Director of Engineering at Nordstrom, for a fireside chat on customer centricity at our 2017 Customer Love Summit.

Nordstrom and Starbucks at Apptentive's Customer Love Summit

Nordstrom and Starbucks are the gold standard for building exceptional customer experiences that transcend digital and in-store, and we got the inside scoop on how they decide what to build next to stay cutting-edge, how they successfully roll out new features globally, how they provide their world-famous customer service across channels, and how they use mobile to foster customer loyalty. As department heads for two of the most customer-centric engineering orgs that exist today, Ryan and Jeff have unique perspectives on what it really takes to put customers at the heart of a business.

Specifically, Jeff shares how Nordstrom approaches:

  • Personalization through bridging the gap between digital and in-store experiences through paying attention to cultural nuances and solving the top in-store challenges through digital channels.
  • Aligning internal teams to focus on the customer through empathy, knowing the data, and balancing the speed of their digital experience with their culture of connecting with customers.

And Ryan explains how Starbucks thinks about:

  • Improving user experience by getting in front of customers as much as possible, eliminating assumptions, and allowing yourself to be surprised by how people actually use your ditigal experience.
  • Loyalty starting with partners (employees), and including a seamless digital experience that brings customer and company together.

Whether your company is early in its mobile innovation journey or consider yourselves seasoned pros, we can all learn a thing or two about #customerlove from Nordstrom and Starbucks. Watch the complete talk with Ryan and Jeff to learn how their teams approach customer love and put the customer at the center of their product roadmaps. If you prefer to read rather than watch, we’ve included the transcription below the video.

Transcription


Emily: Awesome. So who’s excited for this panel?

Crowd: Woo.

Emily: Woo.

Ryan: Right, good.

Emily: So let’s get right to it.

Jeff: Sure.

Emily: What the heck does the director of engineering do at each of your companies? What do you guys do all day long?

Jeff: Very little.

Ryan: Right. Advocacy is a good one. I think…when I think of our roles, certainly my role at Starbucks, it’s about, how do you create an engineering culture? How do you create a culture around, like, great software engineering and customer-focused experiences, in the context of a big retail company? I think that’s a huge part of it. So, relationships with business, tech, to kind of get great things done.

Emily: Awesome.

Jeff: Yeah, I think developing a culture of engineering is ultimately important, especially in the enterprise space. Also, I spend a ridiculous amount of time meeting with my peers, to make sure that I am in the loop on what they’re doing, and vise versa, to make sure if there’s some huge crosscutting project, that we’re ready to go and we don’t stub any toes.

Emily: That’s perfect. Well, that leads right into my next question. So, we all know that technology is constantly changing how we live our lives, and customer behavior. So, how do you decide what to build next and stay cutting edge and ahead of it all?

Jeff: So, for us, we have an insanely talented product and user experience team that really helps and does a good job of guiding us on where we need to go. That combined with an emerging culture of test and learn and doing things like A/B test, to figure out which experiences resonate the most with our customers couldn’t be more important to us at this point.

Emily: Awesome.

Ryan: Yeah. I think one of the really interesting challenges for any company in our space, is like not only are we paying attention to the digital analytics and the stuff that comes in from our mobile applications, and then web applications. But we have to pay attention to store logistics too. I mean, we have to pay attention to what’s happening in our stores, and the recent examples around our mobile ordering system is a great example. How can we use our digital experiences to make that in-store experience, like, really, really good and minimize chaos and everything? I guess, it’s just constantly listening to customers by way of data or actual store logistics, I guess.

Emily: So that’s a super hard problem. Can you dig in a little bit more about how you do the digital and in-store, how you keep track of all of that and all the tech stack that you’re working with? How do you do that?

Ryan: Yeah. That’s a big one.

Jeff: That’s a tough one.

Ryan: It’s a multi-headed hydra. Analytics are huge. As we’re talking today about customer data and the kind of metrics that we pull off our digital experiences, that’s a huge part of it. But there’s numerous other ways for us to get ahead of customer insights. We are constantly in front of our customers. We’re doing customer insights kind of research. We are putting A/B test into the app – Jeff kind of mentioned that – to really test, “Is this something that’s gonna help our customers through the funnel? Is this something that’s helping them get even through the line faster at the store?” Things like that are the daily part of our work.

Jeff: Yes. So, organizationally, we have…so we have a mobile apps business unit and we have a nordstrom.com business unit. We also have an omnichannel business unit that looks across those experiences for opportunities to use both of those platforms, to enable things within the store. I think that’s fairly new for Nordstrom, but it’s been really, really successful so far.

Emily: How did it go about…I know you guys have changed quite a bit the structure.

Jeff: Yes.

Emily: How did this come about?

Jeff: How did this come about? That’s a really good question. I’m not totally sure, to be quite frank. The omnichannel, like, anybody with a brick-and-mortar presence and an online presence, omnichannel is a huge thing for them. But yeah, I’m not completely able to comment.

Emily: Okay, fair. So, Jeff, this Reserve & Try on In-Store feature is super hot right now. I’m sure a lot of you guys have tried it, especially the women in the room. Can you tell us about it and how you rolled it out and how you worked with the stores, how you tested? Tell us a bit about it.

Jeff: Yeah. So the experience…So, currently, it’s only released in western Washington. It’s going to expand nationally here in a couple of months or so. But the experience, for those of you who don’t know about it, essentially…So, two of the biggest complaints we have about stores is it’s really hard to find inventory, and it takes a really long time to do anything in the store. So we’ve allowed customers, using the mobile app, to search inventory in their store, on the app, and then reserve it. To where the store will then accept the reservation, figure out where that merchandise is, and send a text back to the user saying, “We found your item. Please come to the store when you have time.”

And then the user comes in to the store, we have it staged in the waiting room for them, the dressing room for them. They can try it on. They can decide if they like it. They can also decide if they would like other things with it, and then check out right there. So, the ultimate business KPI for this experience is, “Will we be able to get people in and out of the store within 10 minutes?” And, yeah, like you said, it’s been a very, very hot experience for us and one that we’re really, really excited about.

Getting it enabled in the store hasn’t been necessarily a seamless experience. If you grew up in technology like me and I think Ryan did as well, so the cultures around the store are very different than the cultures around the technology group. Though it’s changing pretty quickly. But historically, that’s very much the case. So the way we think about problems and the way the store thinks about problems couldn’t be more different in a lot of situations. So, one, developing an application that is store-centric was a challenge for us early on.

I think the biggest enabler in helping fix that was essentially sending, no joke, the VP, the director, the engineering manager and all the engineers, all the product folks, all the program folks into the store, talking with the people that are actually gonna enable the experience. To get a good idea, essentially building empathy for those people so we can build things that we knew they were going to need, as opposed to what we assumed they were gonna need. I think, if anything, that was one of the biggest things we did to help this become a seamless thing.

Ryan: That’s really…I mean, it’s really interesting. You have these…they’re not worrying worlds, but they’re not worlds that have necessarily always talked to each other. And that’s like the digital and this in-store thing. And so, on the one hand, you have pressures on the digital, which is like we wanna complete our order fast. We wanna get in and out. Like, we know what we want. We just wanna order. In the case of Nordstrom, you want to be able to try on the clothes. In the case of Starbucks, you have to go and pick up your coffee.

But it’s a very, like, rapid fire, in and out kind of thing. I wanna be done. And that clashes sometimes with Nordstrom and Starbucks, both value this customer connection. Like the salespeople at Nordstrom, the partners in our stores at Starbucks, part of the culture is all about this connection. So there’s a potential, if you don’t focus and really try to strengthen this relationship between your retail teams and your tech teams, that you could completely disconnect your salespeople and your partner, your in-store partners from the digital customers. Like, how can we create that connection while still achieving the goals of the digital experience? I think it’s just been a fascinating problem to work on.

Jeff: I totally agree. So one other thing I was gonna mention is that the nature or the culture of the in-store employee for Nordstrom is one of very much an entrepreneurial culture. So if these technology solutions we provide don’t meet their needs, they’re going to go right around them. So it’s really, really important to make sure you understand your customer in that situation, because you could spend millions and millions of dollars developing something that nobody ends up using very, very easily.

Emily: That reminds me of a couple of headlines I saw around Mobile Order & Pay being too successful. Can you speak to that and kind of how you bring that feedback back to the team? What changes do you make?

Ryan: Yeah, sure. A brief context, the Mobile Order & Pay, so this is an ordering experience within the app. You can literally select drinks, food, whatever you want to order, pay with your preferred sort of payment method and then actually go pick up the order in the store. How many people have actually, like, used MOP?

Jeff: Everybody.

Ryan: Nice. See, I have a different thing about the difference between analytic data and, like, survey data, because that was really interesting. But, yeah. So, as MOP got more and more successful, obviously, we’re all really thrilled by it. But as we talked about it on our investor call a couple of months ago, there was sort of a downside to that, which is sort of a…it’s so much increase in the traffic in the stores. But that traffic wasn’t traffic that was standing in line to order drinks. It was traffic that was sort of just waiting for their drinks. Like, they wanted to come pick it up and were just kind of like at the store, maybe not at the right point.

So, what that had an impact on was potentially you open the door and there’s all these people around you. You figure that’s the line and you’re like, “That’s okay. I’ll peace out.” So, what that really has done is pushed us to really strengthen that relationship with our partners in-store, to really think about how we can use the digital experience to smooth out the line, how can we be more accurate with our wait time data, for example? How can we be more clear to the customer when their drinks are ready?

We just launched a great pilot which is rolling out to stores, where we do this very…it was a very simple A/B test, actually, to start. Where we just say…we have a little notification that comes up that says, “Your order is ready.” And like, that simple thing sort of alleviates a lot of anxiety on the customer behalf and they actually know, “Okay. Now I can sort of stand up from my table,” or “I can come in the store and pick up my drink.” So it’s pushed us to just really understand the store operations a lot more.

Emily: That’s really smart. And Jeff, I’m curious, so you’ve also launched Buy and Pick Up in-store.

Jeff: Yup.

Emily: So can you talk about what learnings as you have from the Try On, to Buy, kind of any different hurdles?

Jeff: So it was actually reverse. So we enabled buying…We call them BOPIS. It’s Buy Online, Pick Up In-Store. It’s not a great moniker.

Ryan: BOPIS.

Jeff: Yup. Super awe-inspiring. But it was different, right? Actually, it’s so funny, the code name for the stores experience was ROTIS, Reserve Online Pick up at the store. Anyway. Not interesting to anybody but me. So, they definitely helped inform each other. I think we learned a ton about the in-store experiences from a technology standpoint, from the BOPIS work that we did.

And then again, as both of us have mentioned a couple of times, doing A/B test to figure out locations within the store, where it makes the most sense to pick up items. Which type of in-store employee should be working with a customer at any given time? Like, all that experience, it’s really hard for me to pin-point one right now, but there was a ton of data amassed during the BOPIS work that really informed a lot of the roadmap for what we did with Reserve Online.

Emily: Awesome. So, Ryan, Starbucks is a global operation. You have thousands of stores. So how do you think about global scale with mobile innovation?

Ryan: Man, another, like, huge question. There’s the obvious ones, right, which is like technology at scale, millions of customers using the app every day. Like, how do we expand that out to some of our major global markets? So I think some of the more interesting challenges that I think this is what really makes being a digital product team within this big retail company so interesting, is we have to pay attention to things like cultural nuances and differences in the way that other countries sort of think about their morning coffee habits and everything like that.

So, without diving into too many details, like, even the way that we express our loyalty and rewards program, it’s very different culturally. Like, sometimes you may have a culture that redeems rewards in a different way or they don’t see it as sort of wanting to get a free drink, but maybe they want a different sort of input into Starbucks, for example. Customer experience is king. I think if you think about Starbucks, we try to create sort of a very welcoming and consistent sort of brand experience across the world.

When you walk into a Starbucks in any country, it is both familiar and it’s that third place that we invite you to come in and sit and enjoy. But it also has sort of the cultural distinctions. Every country has their own sort of look and feel at Starbucks. We must take those as part of the digital experience as well. I think it’s really that customer experience angle that’s the most interesting approach to that, in addition to making sure it all scales well.

Emily: One thing you mentioned in the prep is that you actually have multiple apps across the world. From a technology perspective, how do you keep the apps consistent? Is it all based out of headquarters? Do you have teams abroad that are working with your team?

Ryan: Yeah. Current state, we work with a variety of our international partners to do the development work. It’s one of the stronger goals of our technology teams right now, to just look out at the globe and see what doesn’t make sense. In full honesty, it’s one of these things that we’re just trying to make the right plan for right now. I wish we had our grand plans for the global takeover, but we don’t. It’s definitely still something we’re learning. But it’s, again, part of the fun challenges.

Emily: Awesome. So I got this question when I asked folks around what they’re curious in. And a lot of people would like to know, like, “What’s the decision-making process before launching a new feature?” Like, what are kind of some of the things you have to go through internally before you decide something like Mobile Order & Pay, or Reserve & Try on In-store?

Jeff: So, depending on the feature, there’s various maturations you have to do to get something to actually see the light of day. From a Nordstrom standpoint, it can range from a board decision. But typically, it’s something that lands in the product team, an ideation process happens. They go through and they test it. They come up with comps to see what makes the most sense. You’d write out a business plan and you’d find what business KPIs you need to achieve to have this thing actually make sense and spend money on. Then if all those things turn out to be positive, then the project is scoped and handed to the engineering team to execute on.

Ryan: Yeah. I think it comes from a variety of sources. I think more and more, we’re trying to be a data driven digital products team, which means a lot of the product decisions we make are driven very concretely by the analytic data. But it really can…there are multiple influences. It may be that we’re making changes to our Starbucks rewards program, our loyalty program. And that necessarily needs to have its front face in the mobile experience.

And so, that the…it may be sort of a new program from our loyalty team and then that gets…between our engineering and product management team, sort of worked out, designed, all that. It could be something wholly internal. So it’s something that we know we wanna either improve in the app. Or we’re seeing analytic data that says, “Oh, man, we can probably improve some customer experience and really shorten the time through the Mobile Order funnel,” for example. Or Erick has sort of alluded to this, sometimes you just get a call from Howard and there’s some changes to make. Thankfully, he’s an incredibly sharp dude. So if he says he wants something in the app, there’s usually a good reason.

Jeff: I think it’s a pretty interesting time to be alive in this space right now. Because the process I just described sounds very long and onerous. There’s a strong desire within Nordstrom to shorten that as much as possible, and not spend a lot of time trying to figure out the exact right thing and get things out as soon as possible. So you can then get it in the customers’ hands and then figure out whether it resonates or not.

It was a huge pain point for my engineering team early on, to where we would do all this work. We would release the experience and then it wouldn’t have any needle moving business KPIs. So we did all this work and we tested it and we looked at all the data, but we nev

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