A Starbucks employee prepares a takeout order. The company recently announced that Starbucks stores will either be temporarily closed or will only accept orders for delivery or mobile order and pay (MOP) payments.
- More than two-thirds of Starbucks sales are now driven by drive-thru, mobile ordering and delivery.
- Starbucks initially established its brand around being a “third place” offering premium coffee.
- One analyst said the change shows Starbucks is adapting well to changing trends.
Starbucks is moving away from its roots in favor of convenience and efficiency.
More than two-thirds of Starbucks’ orders now come from its mobile app, drive-thru and delivery, the company said on its August 2022 earnings call. In other words, only 28% of customers who walk into a Starbucks place an order with a barista, and some of them even have a drink inside the Starbucks store.
Starbucks customers seem to love the convenience of alternative ordering, and Starbucks is making it even easier. The Wall Street Journal (WSJ) reported in May 2022 that about 90 percent of new Starbucks stores have drive-thru. The technology, which allows customers to place orders through staff-operated tablets in drive-thru lines, has been installed in about half of its stores, and plans to introduce it in 65% of its stores by the end of 2022, says CEO Howard Schultz. ) said in a conference call.
Starbucks has in the past closed stores in underperforming malls to focus on drive-thru. The chain is also considering a drive-thru-only store. It has already opened stores that only accept orders, and has also launched a joint store with Amazon Go, which has partnered with Amazon to allow mobile ordering and payment only.
Starbucks was initially very successful by popularizing premium coffee and introducing Americans to espresso drinks like caffe latte. The chain advertised itself as a “third place” where people gather outside of their homes and workplaces. However, this concept runs counter to the company’s emphasis on convenience in recent years, shifting the definition of “third place” to a “mindset” that transcends physical space. .
The changes at Starbucks don’t mean that most stores will have no seats or places to gather, Edward Jones analyst Brian Yarbrough told Insider. Yarbrough said Starbucks’ focus on drive-thru and mobile ordering was partly due to the pandemic, but the shift in priorities was happening even before the coronavirus hit.
“I think the days of customers relaxing with coffee are a thing of the past,” he told Insider.
“Customers don’t need all the space to sit, and drive-thru outperforms stores without a drive-thru. Fewer seats that need maintenance means less cost for Starbucks,” he said. speaking.
According to Yarbrough, Starbucks has been so successful because the store has responded to changing customer tastes and taken a different approach. As an example, he points out that 75% of the drinks Starbucks sells today are cold drinks that weren’t on the original menu.
Other quick-service chains are similarly shifting toward prioritizing drive-thru. Chipotle is rolling out Chipotlanes in new stores and opening drive-thru specialty stores that allow mobile ordering. The benefits are much the same reasons Starbucks uses drive-thru: higher margins and faster operations.
[Original: Starbucks is continuing to place less emphasis on its ‘third place’ identity that made it a billion-dollar company]
(Translation: Mayuko Oba Editing: Toshihiko Inoue)
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Source: BusinessInsider
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