Starbucks, Hoping for Growth

The American business community has become somewhat captivated by the prescription of freshly brewed CEO, Brian Niccol, for fixing the ailing Starbucks business. The restoration plan hinges on a combination of raising operational performance and nostalgia-based marketing (“Back to Starbucks”).

Loss of share is commonly due to poor brand performance. It is less common for a business to be losing share as a consequence of both brand deterioration and poor operational performance. Starbucks as of March 31, 2025 has shed foot traffic for five consecutive quarters and has achieved that dubious distinction. For this discussion, let’s set aside operational performance to just focus on brand and marketing.

Based on three decades of Forethought data, when a brand’s reputation is waning, well-constructed brand restoration generally takes 18 to 24 months if the rebuild is a quality-based proposition, and if the rebuild is a price-based proposition, 12 months. That assumes the proposition is soundly based on category drivers of choice.

The Starbucks marketing focus has been primarily based on two nostalgia elements; that is, the reintroduction of the "third space" concept of welcoming customers back to a comfortable coffeehouse environment and second, personal connection with the barista evidenced by handwriting the customers’ name or other personalized message on cups.

Does Nostalgia Drive Consumer Behavior?

Tressie Lieberman was appointed as the first global chief brand officer at Starbucks and commenced on November 4, 2024. One of her first actions was to undo the appointment of the agency of record, WPP made just a few months earlier and appoint Anomaly to handle its U.S. creative business.

The first work from Anomaly was the creative ‘Not My Name.’  ‘Not My Name’ first aired on linear TV on 27 January 2025 during the Kansas City Chiefs vs. Buffalo Bills NFL game. The spot centered on the Starbucks reintroduced practice of writing customers' names or motivational messages on cups.  According to the trade press, ‘The ad emphasizes personal connection and encouragement, aligning with Starbucks' commitment to fostering community and positivity.’

Please see Starbucks “Not my name” https://www.youtube.com/watch?v=rSAKe1nrelo 

The effectiveness of the Starbucks marketing communications centers on one simple question.  Is the personalized interaction with the barista a category driver of choice?  That is; by raising perceived performance of personalization, will customers return to Starbucks?  If the answer is no, then why was a return to personalization the basis of a strategy and a marketing communications campaign?

Drivers of Growth and Generative AI

Prophecy Thoughts and Feelings® was applied to determine the primary category drivers of choice.  BrandComms.AI™ then ingested the category drivers of choice and determined the most effective marketing communications. At the core of BrandComms.AI is the Communications Triple Play™, an actionable strategic blueprint that determines what matters most for a brand to drive consumer choice and provide a distinctive position in the market. The Communications Triple Play includes an emotional detonator, a quality driver and a price driver.

The validated Prophecy Thoughts and Feelings triple play for Starbuck was the emotion, ‘happiness,’ the quality driver ‘ability to customize orders,’ and the price driver was the ‘Starbucks loyalty program.’  The creative concept developed by BrandComms.AI was an animatic named, ‘Royal.’

BrandComms.AI is a generative artificial intelligence platform for producing efficacious marketing communication. Rather than using the traditional agency approach to creativity, that is, judgement and intuition, BrandComms.AI ingests brand codes, profile of the buyers, situation to be addressed (typically from tracking data) and scientifically verified drivers of choice to produce creative concepts guaranteed to drive growth. Please see the alternative animatic.

BrandComms.AI: “Royal” https://vimeo.com/1012974216/f72aac4ebc

The Tale of the Tape

Putting aside the dramatic reduction in time and costs associated with applying BrandComms.AI (reduction of around 75% in both time and costs), ‘Not my Name’ was a fully produced ad being post-tested whereas ‘Royal’ was a BrandComms.AI generative AI produced animatic being pre-tested.  Please keep in mind, it is usual to find that the performance of a creative idea embodied in an animatic lift when it shifts from animatic to produced spot.

One last point before we look at the findings.  Implicit in “Back to Starbucks” was the return of past guests. For the campaign to be successful, Starbucks needs to bring back to its stores, lapsed customers. These are sometimes referred to as non-past-three-month-guests – NP3 guests.  BrandComms.AI understood the challenge and primarily spoke to non-customers.

In the following bar charts, we see the ‘Royal’ animatic statistically significantly outperform the ‘Not My Name’ spot. Significance testing was conducted between the Baseline and Test Streams at the 5% level of significance. Blue indicates the Test Stream result was significantly higher than the Baseline Stream result. ‘Not My Name’ produced no statistically significant differences.

Incidentally, using independent, third-party data, Prophecy Thoughts and Feelings has been consistently found to be highly predictive of changes in market share. For example, in 60 separate studies the correlation between predicted change in share and actual, third-party validated change in share was greater than 0.8.

The testing indicated that ‘Not my Name’ was modestly positive in initiating choice and in absolute terms, was predicted to be a modestly successful spot. In relative terms however, the BrandComms.AI animatic based on the Communications Triple Play was statistically significantly more successful at driving predicted sales and in particular, inviting non-past three-month guests back to Starbucks.

The bottom line is, if Starbucks wishes to revitalize the brand and drive the return of NP3 guests, its creative platform should be ingesting the scientifically validated category drivers of choice.

Brian Niccol's “Back to Starbucks” calls for sales growth of 4.4% in fiscal 2025 which might seem modest, but keep in mind, in the North American market, same-store sales had fallen for five consecutive quarters. Against that backdrop, it would seem to some commentators that growth of 4.4% could be regarded as ambitious.