Amid public backlash after Starbucks Korea ran an inappropriate promotion called "Tank Day" on the 18th, the anniversary of the May 18 Democratization Movement, it has emerged that the issue was not a simple staff error but an organizational failure in which the internal review system effectively did not function.
The promotion went through a four-step reporting process up to the CEO for final approval, but no one in the process pointed out that using the term "tank" on May 18 was inappropriate. Some approvers did not even open the attachment containing the marketing mockups and approved it out of habit.
Shinsegae Group held a press briefing at the Josun Palace Hotel in Gangnam District, Seoul, on the 26th and announced the findings of its fact-finding probe into the Starbucks Korea May 18 promotion controversy. The announcement was delivered by Jeon Sang-jin, Shinsegae Group head of management (executive vice president).
Jeon said, "Shinsegae Group conducted an internal investigation for about a week starting on the 19th, immediately after the incident, and so far has found no clear evidence to prove an intent to disparage the May 18 Democratization Movement." He added, "There were legal constraints in establishing the facts clearly, such as some employees refusing to submit their cellphones for privacy reasons," and said, "We will actively cooperate with the police investigation going forward."
According to Shinsegae Group, the promotion was proposed by the Starbucks Korea e-commerce team. The planner drafted the proposal, the Head of Team reviewed it, the Deputy Minister in charge signed off, and the CEO gave final approval. In fact, this promotion item was finalized after passing through a four-step reporting line including the Head of Team, the head of the Strategy Support Division, and the CEO.
However, in this process no one raised the issue of the inappropriateness of tying the May 18 anniversary to the term "Tank Day." Jeon said, "There was not a single objection during the planning and approval process."
During the investigation it was also confirmed that some approvers approved without opening the email attachment containing the marketing design mockups. This indicates the approvals were given customarily without sufficient review.
Shinsegae Group said it has so far found no clear evidence to prove intent regarding this promotion. Starting on the 19th, the group conducted about a week of forensic reviews of cellphones and laptops and cross-interviews involving the entire Starbucks Korea e-commerce team and the approval line including the Strategy Planning Division and the CEO. Other devices and hard drives used by the staffer for work were also collected and examined.
However, three e-commerce team employees, including the staffer who proposed the "Tank Day" NAMING., refused to submit their cellphones, citing invasion of privacy. As a result, the company was unable to properly verify what conversations took place among those employees regarding the promotion or what discussions occurred in the course of handling the work. Because internal messenger chat records are stored on the company server for only one week, it also could not check conversations from the initial planning stage.
However, in the internal probe the employees involved strongly denied intent. Jeon said, "The employees who planned the promotion said during the investigation, 'We focused only on matching the rhythm with existing marketing phrases like mugwort in the bag and did not think of May 18,' and 'We used artificial intelligence (AI) to generate the phrasing and only recognized the problem after the controversy arose.'"
Still, Shinsegae Group said it is difficult to conclude the presence or absence of prior collusion or intent based on those statements alone, and said it would actively cooperate with the police investigation to verify additional facts regarding the three e-commerce team employees who refused to submit their cellphones. Jeon said, "If the police investigation confirms an intent to disparage the May 18 Democratization Movement, the employees involved will be dismissed immediately and held civilly and criminally liable."
Shinsegae Group has removed five employees involved in the promotion from their duties. Former Starbucks Korea CEO Son Jeong-hyun and the executive in charge were dismissed. The group said it would take stern measures against additional responsible parties depending on the outcome of future investigations.
Shinsegae Group also addressed some suspicions raised online. Regarding the name of the tank tumbler, it said the product was made by an overseas manufacturer and that the name was inspired by an actual "water tank," according to the manufacturer. As for the suspicion that the 503-milliliter capacity evokes the prisoner number "503" of former President Park Geun-hye, it explained that the figure is the conversion of 17 ounces into milliliters.
On the issue of setting the mini tank tumbler's release date as Apr. 16, the date of the Sewol ferry disaster, Starbucks Korea initially proposed Apr. 20, but the event vendor confirmed Apr. 16.
It also denied the suspicion that the 21% discount on the tank duo set symbolizes May 21, the day of the military's mass shooting during the May 18 Democratization Movement. The price of the mini tank tumbler in the set was adjusted from 25,000 won to 12,500 won, lowering the overall set price from 60,000 won to 47,500 won, and the discount rate came to 21% in the process.
Jeon said, "The public has shown great love for Starbucks Korea over the past 27 years since the first store opened in 1999, but we failed to repay that love and left a deep wound." He added, "We will use this as an opportunity to reflect on corporations' social value and responsibility," and said, "We will rebuild trust from the ground up and reestablish ourselves as a company loved by the public."