How Starbucks Plans To Improve Its Ordering System And Amp Up Service
Starbucks — purveyor of the ludicrously popular Pumpkin Spice Latte – is in for some major changes, according to Starbucks leadership. The Seattle-based chain, which first opened its doors in 1971, has grown continuously for more than 50 year, becoming the world's largest coffee company (via Zippia).
In a September 2022, investor presentation, interim CEO Howard Schultz shared a lofty plan to increase the productivity of Starbucks cafes nationwide. The chain will invest $450 million dollars in store upgrades that will improve the speed, efficiency, and functionality of cafes (via CNBC).
As part of the upgrades, Starbucks will roll out automated in-store ordering at locations across the U.S. within the next few years, allowing workers to focus on preparing drinks rather than working the cash register. The company will also continue to foster its mobile ordering and Starbucks Rewards system, which is currently used by almost 30 million Starbucks customers in the U.S. alone.
Drive-thru, delivery, and mobile orders accounted for 72% of the chain's domestic revenue during the third fiscal quarter, up 9% from the previous quarter (via QSR Magazine). In response to this uptick, the chain intends to open an additional 2,000 locations over the next 3 years, which will include pick-up only and drive-thru only concepts (via Barron's).
Cold drinks now account for 60% of Starbucks sales
The company also unveiled a sophisticated new cold beverage system that will increase the speed at which workers can prepare cold drinks. Iced beverages — ranging from cold brew to Apple Crisp Oatmilk Frappuccinos — currently make up 60% of all Starbucks beverage sales year-round, and an even more dominant 75% during the summer months (via The New York Times).
The new system, which has been tested at an unnamed Starbucks store, will feature automated dispensers for ingredients like milk, whipped cream, and ice. The company is also in the process of developing a faster, less labor-intensive cold brew-making system, and has begun rolling out a new hot coffee machine that is able to grind and pour a fresh cup of coffee in 30 seconds (via CNBC).
In the investor day presentation, Starbucks leadership indicated that these new automated systems were partially designed to reduce the stress levels of employees. Employee satisfaction is key for the company, which experienced its highest employee turnover rates ever in 2021.
In recent months, the chain has also faced increased unionization efforts by Starbucks employees from coast to coast. Thus far, partners at over 230 Starbucks locations across the U.S. have voted to unionize, citing difficult working conditions, insufficient pay, and understaffing as reasons for the unionization push.
While it's unclear whether the automated upgrades will be enough to win back favor with the chain's workers, Starbucks' continued growth shows that its popularity with customers is stronger than ever.