Starbucks’ strategy to improve customer and barista experience

Starbucks’ strategy to improve customer and barista experience
Linked media – Linked media

Starbucks locations nationwide are introducing new measures to streamline drink orders and reduce wait times. This revamp comes as the coffee chain anticipates a rise in mobile app orders.

Central to this initiative is Starbucks’ “siren craft system,” a set of procedures designed to facilitate barista tasks and expedite service. Over 10 percent of Starbucks’ 10,000 stores have already adopted this system, which reorganizes the production sequence for hot and cold beverages. The company aims to implement it across North America by the end of July.

Starbucks executives believe these changes are crucial, especially after a disappointing second quarter in April, where U.S. same-store sales dropped by 3% and foot traffic fell by 7%. Consequently, the company revised its 2024 forecast downward.

Incomplete orders via mobile apps and a decline in walk-in customers have been issues since the mid-2010s. CEO Laxman Narasimhan has emphasized the need for store improvements.

Katie Young, senior vice president of store operations, highlighted the importance of better managing unforeseen events in coffee shops. “It’s about the ability to respond flexibly to events that we can’t predict,” she explained to CNBC.

As of Monday, Starbucks has opened its app to non-rewards members, which is expected to boost traffic and orders. Analyst Peter Saleh of BTIG noted that high demand and limited kitchen space in some stores necessitate more efficient operations.

Amid rising inflation, Americans have become more cautious with their spending, often cutting back on coffee and snacks. In response, Starbucks introduced a $5 food and drink combo to emphasize value.

Starbucks has been addressing bottlenecks since launching its 2022 reinvention plan under Howard Schultz, who returned amid a growing labor movement and changing consumer preferences. The current changes stem from employee feedback on obstacles to creating drinks and engaging with customers.

The siren system includes a role akin to a production line accelerator, or “play caller,” who assists with tasks like refilling cups and managing unexpected crowds. Starbucks plans to train existing workers for this role or hire new baristas if necessary.

Young noted that one issue was the constant operation of the espresso machine, preventing staff from attending to customers. Additionally, the order of drink preparation will change; previously, cold drinks were prioritized over hot ones, potentially causing delays. Now, drinks will be prepared in the order they are received, improving efficiency.

Baristas will also gain more control over the digital production manager, an iPad system that sequences orders. This flexibility allows workers to prioritize orders as needed.

The app’s expansion has added urgency to the siren system rollout. Mobile ordering and payment will also be available on third-party platforms to reach more customers.

Increased traffic and workloads come as some baristas continue to raise concerns about staffing and scheduling, especially those affiliated with the Workers United union. Starbucks claims to have made significant staffing and scheduling improvements in recent years.

Saleh remarked on the slow rollout of the siren system, which was first introduced at Starbucks’ 2022 investor day. Historically, Starbucks has implemented changes quickly.

Young reported that the siren system has significantly reduced order wait times. Stores using the system have seen a rise in customers served during peak hours, translating to an estimated 1% increase in comparable sales annually.

Starbucks is also introducing new equipment under the siren name, including custom ice dispensers, milk dispensers, and faster blenders. This equipment, along with updated in-store training processes, is expected to yield significant returns on investment. By the end of the year, 10 percent of stores will have siren equipment.

Young expressed confidence in the investments made in the staffing system, aiming for better-managed wait times and a comfortable environment even during busy periods.

Associated media – Connected media
By Ethan Brown Lambert

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