Opinion: The Internet of Things, huge data, and Starbucks
- 18 January, 2013 15:16
As I was writing that column I got a call from a friend and I was telling him about the product and the technologies used. I went on to claim that connecting monitoring devices to "things" and, in turn, connecting those devices to the 'Net was the way of the future; that we can expect anything and everything to eventually be connected and that we'll be tracking the minutiae of what happens in the real world.
I further argued that the coffee cup you get from Starbucks will eventually be instrumented and connected.
My friend disagreed; he felt that there would be some lower limit to the return on investment in the data that could be gathered that would mean that there would be no profit involved in connecting Starbucks coffee cups to the Internet of Things and therefore it would never happen.
I disagreed and here's my argument: First, let's consider how cheap it will become to instrument a coffee cup.
Today, it would be far too spendy to do such a thing, but tomorrow ... ah, tomorrow.
Tomorrow there'll be a strip down the side of the coffee cup that contains temperature, pH and volume sensors, along with some flash RAM for storing data while connectivity is lost, and for tagging the cup when the order is filled (which could be cross-referenced with the till roll to identify the purchaser), accelerometers to detect movement, and a WiFi transceiver to provide not only communications but location services as well. And this instrumentation package will be dirt cheap ... maybe a few cents by the end of the decade.
Now, let's consider what we, or rather Starbucks, could learn from this smart, connected coffee cup: Starbucks could track how coffee is consumed, including how fast it's consumed, how big each sip is, and whether sugar and or milk or half-and-half or cream is added.
They'd know if the coffee wasn't finished, what temperature the coffee was when it was abandoned, how far the cup travelled while being drunk, and how it travelled (for example, if the cup followed the street grid and frequently exceeded walking speed and stopped often ... that could be inferred that it was on a bus).
In terms of understanding your customer base this would be huge! Those customers who don't drink fast and leave coffee in their cups could be automatically given a doubled-up cup next time to maximize the time the coffee stays hot to increase their satisfaction with the product which, in turn, would help ensure customer happiness and loyalty.
Now, if the purchaser of the cup of coffee paid with a debit card and was identified as the holder of a Starbucks rewards card, but this was the first time she's used the card for, say, 10 days, and she added an extra shot of espresso and extra sugar, maybe she's just getting over a cold.
What could Starbucks do? Let's send a coupon for a cold remedy to her smartphone and, when she gets off the bus and is passing the smart sign in a "companion" store (because we know where the cup is), we'll flash an ad for a shop where she can buy the medicine.
Track enough customers and you might figure out that there's a hot spot of customers where you should build a new Starbucks. What's that insight worth?
Ah, you might be saying, that's an awfully large amount of work to leverage just a small number of your customers, but if the cost is just a few cents for the cup and next to nothing for the data analysis and processing, why wouldn't you do it?
When "Internetizing" things becomes trivially cheap to do and drives competitiveness up a few notches, you'll have no choice. You'll collect and analyze not just Big Data but Huge Data and store it and re-analyze it repeatedly, and in the end companies like Starbucks will know as much about your coffee drinking and your routine as your significant other, your doctor, your accountant, and your analyst combined. Maybe more.
And the result will be a perfect cup of coffee that stays hot, that's easy to buy and that makes you committed to Starbucks. Who wouldn't want that?
Gibbs is well caffeinated in Ventura, Calif. Your choice of beverage to firstname.lastname@example.org and follow him on Twitter and App.net (@quistuipater) and on Facebook (quistuipater).
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