Starbucks’ Strategy to Improve Customer and Barista Experience

Starbucks’ Strategy to Improve Customer and Barista Experience

Starbucks locations across the country are rolling out new measures to streamline drink ordering and reduce wait times. The revamp comes as the coffee chain anticipates a surge in mobile app orders.

At the heart of this initiative is Starbucks’ “siren craft system,” a set of procedures designed to make baristas’ jobs easier and speed up service. More than 10 percent of Starbucks’ 10,000 locations have already adopted the system, which reorganizes the production sequence for hot and cold beverages. The company aims to roll it out across North America by the end of July.

Starbucks executives believe these changes are crucial, especially after a disappointing second quarter in April, when U.S. same-store sales fell 3% and foot traffic fell 7%. As a result, the company lowered its 2024 forecast.

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

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

Starbucks opened its app to non-rewards members on Monday, which should boost traffic and orders. BTIG analyst Peter Saleh noted that high demand and limited kitchen space in some stores require 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 faced bottlenecks since launching its 2022 reinvention plan under Howard Schultz, who returned amid a growing union movement and shifting consumer preferences. The current changes stem from employee feedback about obstacles to creating beverages and interacting with customers.

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

Young noted that one issue was the espresso machine running continuously, which prevented staff from attending to customers. Additionally, the order in which drinks are prepared will change; previously, cold drinks were prioritized over hot drinks, 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 based on need.

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

The increased traffic and workloads come as some baristas continue to raise concerns about staffing and scheduling, particularly those affiliated with the Workers United union. Starbucks says it has made significant improvements to staffing and scheduling in recent years.

Saleh commented on the slow rollout of the siren system, which was first introduced at Starbucks’ 2022 Investor Day. Starbucks has historically implemented changes quickly.

Young said the siren system has significantly reduced order wait times. Stores using the system have seen an increase in customers served during peak hours, resulting in an estimated 1 percent increase in comparable sales per year.

Starbucks is also introducing new equipment under the siren name, including customized ice dispensers, milk dispensers, and faster blenders. This equipment, along with updated in-store training processes, is expected to produce 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 management of waiting times and a comfortable environment even during peak periods.