Starbucks wants to improve in-store and mobile ordering experiences through a combination of technology, improved employee experience, and reimagined cafes, CEO Brian Niccol said on a Q4 2024 earnings call Wednesday.
The company plans to boost hours for associates, put condiments back in the hands of customers, and separate out areas for mobile and in-store pickup. All the while, Starbucks wants to ensure cafe and drive-thru orders are fulfilled in four minutes or less.
Starbucks’ efforts are aimed at offering better experiences by balancing consistency and convenience with comfort and the human touch. Niccol’s strategy entwines customer experience and employee experience, putting each at the core of the chain's turnaround strategy.
Traffic declined in Q4, and Starbucks saw a 7% decline in comparable store sales for the quarter, according to EVP and CFO Rachel Ruggeri.
For Starbucks' turnaround effort, CX is essential.
“My experience tells me that when we get back to our core identity and consistently deliver a great experience, our customers will come back,” Niccol said. “Our problems are fixable. Most of what we need to do is in our control.”
Better CX through EX
Starbucks has treated CX, EX and operational bottlenecks as isolated pain points in the past, but now the company is improving the system with each in mind.
The company has made it “harder to be a customer than it should be,” Niccol said. To inform how Starbucks solves its operations problems, Niccol collected feedback from baristas and customers. One of the results is that the company is rethinking how it handles scheduling.
The company will test changes to its labor model in a “couple thousand” stores, Niccol said. Changes will include offering cafe employees additional hours and rethinking scheduling practices to make sure locations have enough staffing available during peak hours, particularly in the morning.
The goal is to ensure workers have the time to add “that hospitality and that human touch” when they pass an order in-store customers without slowing down mobile order throughput. Notably, Starbucks wants to bring back Sharpies to write names on cups.
“I also want to have a scenario where our baristas feel like they have the ability to give a great experience,” Niccol said. “I'm sure you've heard this over and over again: The customer experience will not exceed that of the partner's experience.”
Better staffing could create a more relaxed atmosphere for baristas, according to Neil Saunders, managing director at GlobalData Retail. This would help staff spend more time engaging with customers.
“This matters because as well as wanting a great product, customers want to feel good about their interactions with Starbucks,” Saunders told CX Dive in an email. “At the moment this is far too hit and miss.”
Starbucks will also reintroduce its condiment bars, which will let customers add their own milk, sugar and other accouterments. Baristas took charge of condiments during the pandemic, and Niccol expects the return of self-service to boost CX while speeding up service.
Time is of the essence
Slow order fulfillment is one of Starbucks' top ongoing challenges.
Niccol estimated that about 50% of transactions already happen in four minutes or less. However, achieving this reliably and efficiently delivering orders will be critical to Starbucks’ turnaround effort, according to Saunders.
“Generally, most people want a quick coffee fix when they’re on the go — that makes timeliness and efficiency paramount,” Saunders said. “Starbucks has faltered on delivering this over the past couple of years and it has put some customers off and reduced satisfaction.”
Starbucks is working on an algorithm that will help baristas determine the most efficient drink-making sequence as orders come in, according to Niccol. The company will also place guardrails on mobile ordering to improve the experience for all customers.
“Today more than 30% of transactions are driven by mobile orders,” Niccol said. “At peak it can drive an influx of orders that can be difficult to sequence and quickly deliver to our customers.”
The Siren Craft System, a series of operational enhancements designed to reduce order fulfillment times while improving CX, and the associated Siren System equipment overhaul will go hand-in-hand with better staffing practices to improve experiences for customers and employees, according to Niccol.
Starbucks’ approach to the Siren systems will be modular. Some stores need the full Siren Craft System, some stores just need certain elements of it, and some stores will revamp staffing practices instead, according to Niccol.
Great experiences for every customer
Customers placing orders for pickup and customers stopping by a Starbucks cafe to dine in want different experiences, and some of Niccol’s changes are aimed at improving CX for each.
The plan includes separating the mobile pickup and order-at-the-counter experiences, not just operationally, but physically. A dedicated area for mobile pickup would let order ahead customers grab their drink quickly without cutting them off from the in-store experience.
“I know we've got it right when people are questioning whether or not they want to order mobile, because maybe if I have a few minutes, I'd rather stay in the cafe and get that cafe experience from our barista, where it's handheld,” Niccol said.
Starbucks will aim to make the in-store experience more inviting with revised cafe designs that include more comfortable seating and amenities, according to Niccol. The company plans on bringing back ceramic mugs for in-house orders as well.
Starbucks is courting two kinds of customers, and order efficiency and cafe ambiance each cater to the needs of a different group, according to Saunders. The company has its work cut out for it if it wants to win back the dine-in crowd, as it will be competing with the experience local coffee shops provide.
The challenges are great, but Niccol is on the right track, according to Saunders. However, it will still take time for Starbucks’ CX improvements to deliver positive results for the company.
"We have to make it easier for our customers to get a cup of coffee,” Niccol said.
