Starbucks Mobile Ordering Is Going Too Well…

Tom Ryan, Contributor
Starbucks DriveThruStarbucks has a good problem with mobile ordering. The retailer experienced its weakest quarterly comp gain since 2009 at the end of last year. On its first-quarter conference call in January, company officials attributed the lack of growth to long lines that are being exacerbated by an uptick in mobile ordering. Waits at its higher-volume stores at peak times caused some customers to walk out.

To test ways of eliminating the bottlenecks, Starbucks will open a dedicated mobile order and pay-only store at its Seattle headquarters.

The location will only serve Starbucks employees who make use of the Mobile Order & Pay app. A large pick-up window offers a view to baristas preparing the orders, according to Reuters. Starbucks’ headquarters has two cafes that serve its more than 5,000 employees.

Introduced in 2015 to help customers avoid lines, Mobile Order & Pay accounted for 7% of U.S. orders in the last quarter, up from three percent in the prior year. Those ordering receive an estimated time when their beverage will be ready and then head to a pick-up location.

“An early experiment, this first of its kind experience will be tailored specifically for convenience and we expect to learn from this location,” wrote Andy Adams, senior vice president, global store development, Starbucks, last week in a note to employees,

To address the problem, Starbucks has focused on workflow, including adding one or two more baristas dedicated to mobile orders at high-volume stores during peak hours. The company is also testing sending text alerts to customers when orders are ready.

Some on the RetailWire BrainTrust panel of retailing experts saw the mobile customer-only concept as a win with implications beyond Starbucks.

“Having one or more dedicated mobile order and pay-only stores, near existing dine-in Starbucks locations, will allow for the load-balancing of orders — smoothing out the experience for customers and baristas,” said Shawn Harris, North American retail and hospitality industry lead at Zebra Technologies. “Smart idea.”

“[It] relieves the stress on the regular Starbucks locations,” said Min-Jee Hwang, director of marketing at Quad Analytix. “If they plan on operating these locations near or next to existing locations, it makes transferring staff during peak hours very convenient. Bottlenecks should mainly remain a food/beverage headache because of the time required to prepare the orders, compared to retail where they only need to hold the item(s). If executed correctly, this idea of Starbucks can become very successful.”

Others noted that Starbucks’ willingness to experiment was a good sign.

“Test, experiment, measure and iterate. Starbucks is working through the digital transformation as any retailer should be doing,” said Adrian Weidmann, Principal at StoreStream Metrics. “This is a new world and the instructions can’t be found in a textbook (yet!). Learning and adapting is key to success.”

“Imagine what this same mobile order and pay model would look like for grocery stores,” said Cathy Hotka, principal at Cathy Hotka & Associates. “We’re going to see a lot of trial and error as customers decide on their preferences and retailers respond.”

Some BrainTrust members, however, saw potential difficulties arising in execution.

“One of the issues with a drive-thru only location is queuing,” said Steve Montgomery, president of B2B Solutions. “What do you do with the customer who has shown up too early? Where do they park? How do you get their order to them? The same is true for the customer who is a few minutes late. Yes, their order is ready but now has been sitting there for ten minutes cooling off or warming up.”

“A good idea perhaps, but the road between the concept and a successful implementation is going to be bumpy,” said Montgomery.

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