Starbucks is bouncing back from the worst of the pandemic with a strategic approach—it’s closing some stores, repurposing others, and even designing new layouts for the future. Having already announced 400 store closures in June, it plans to slash another 100, likely in urbanized areas that are underperforming. Despite these setbacks, Starbucks continues to innovate and plan for the new normal with the knowledge that its typical customer looks much different than before the pandemic.
Strategy
The java giant has come to terms with the fact that the modern consumer is changing quickly and now values safety, convenience, and efficiency more than ever. Starbucks is not waiting around for the pandemic to be over, but rather pushing recovery through evolving its portfolio. The drive thru and mobile orders are increasingly popular, and to add to the momentum, Starbucks is rolling out pickup stores, walk-up windows, curbside locations, and handheld devices for staff.
Drive Thru & Mobile Orders
In Q4 of last year, drive thru and mobile orders made up 75% of Starbucks revenue in the States. Now that the pandemic has made the primacy of the drive thru even more clear, the coffee chain is set to iterate in new, less populated markets. It is considering creating multiple lanes to funnel customers through more quickly, while encouraging mobile app ordering and payment. To keep mobile orders strong in-store, Starbucks is planning on adding a separate designated counter to create a contactless experience at highly frequented locations.
Pickup Channels
Starbucks is testing several new store concepts and channels like pickup locations and curbside. Pickup stores will serve a dual purpose: they will decrease crowding in cafes, and cater to on-the-go customers. The pandemic has sped up rollout, which will take place in major cities over the course of 18 months rather than a few years. These cities will eventually see a combination of traditional cafes and pickup locations, and Starbucks envisions both options will frequently be within walking distance of one another.
To complement pickup locations, Starbucks is introducing curbside pickup, which will allow customers to order and pay from the app and pick up their order from their car at a designated parking spot. The coffee chain is amping up curbside in new stores, and some models will even feature it exclusively. Curbside pickup is available in 800 locations now, and will be running at 2,000 stores by the end of 2021.
Handheld Devices
To add to its overall strategy, Starbucks has decided to take a page out of Chick Fil A’s book and deploy handheld devices at the drive thru. CEO Kevin Johnson expects this to dramatically increase throughput and elevate the customer experience. Starbucks is envisioning a unique integration whereby the customer can decide to go in store to pick up their order if the wait appears to be too long. The timeline for this specific feature is unknown, but handhelds will be rolled out at 400 stores by the end of Q1 2021.
Takeaways
A strategic shift is reshaping Starbucks’ operations on a macro scale. The coffee chain is finding opportunity migrating from urban to suburban areas, and from cafes to drive thrus. As consumers continue to be concerned about social interaction, Starbucks will amplify the drive thru, mobile orders, and new pickup channels and technologies that make their lives easier. The java giant predicts a strong fiscal year in 2021, and given its current initiatives, it’s no surprise why.
Presto
Presto offers solutions that support initiatives like those launching at Starbucks. The restaurant technology company offers compatibility with various service channels and provides technologies that keep guests safe and optimize operations. Presto Contactless enables customers to safely order and pay by scanning a QR code at the drive thru, parking lot, walk-up window, and via takeout. Its server handhelds optimize staffing, speed up the drive thru line, and provide a better overall customer experience. To learn more visit presto.com/contactless.
