A few days ago, Starbucks had a pretty big earning miss, prompting lots of discussion about what went wrong and how to fix it. In a recent interview with CBS, CEO Laxman Narasimhan had this to say:
The company's plan to turn things around includes updating its app and mobile payment offerings, speeding up service, and overhauling its menu to lure customers back.
Ex-CEO and founder of Starbucks, Howard Schultz had no issues jumping into the discussion saying in an interview:
“The stores require a maniacal focus on the customer experience, through the eyes of a merchant,” he added. “The answer does not lie in data, but in the stores.”
As Will Roger says in the quote below, it's never a bad idea to reinvigorate you products and offerings. Afterall, you can't just sit there, can you?
But I have a different take on the situation. I think that it's possible some of their fixes will actually hurt them more than they will help them and that as Schultz says, they really need to refocus on their customer experience.
Starbucks was one of the first companies to embrace the idea of the 3rd place, a place where people can gather. It was a place where people who worked from home, pre-Covid of course, could get out of the house, have some good coffee and get some work done. As importantly, they had a place to gather with others and not be so isolated.
Because you could sit the for as long as you wanted, I think that people didn't mind paying as much as they did for coffee. They weren't just buying coffee, they were getting an inexpensive office and meeting space. They were getting an opportunity to socialize or at least people watch. They were getting some time out of their homes. That was a pretty good deal for the price of a coffee, even if you splurged for a fancy cup!
As they added mobile ordering, they created a situation where they were often ignoring the person actually in the store for people who were somewhere else. I remember once waiting for 10 - 15 minutes to have a barista take my order and then waited for it to be made while I could see them making lots of mobile orders, making them the priority.
Now Starbucks is building a lot more of their stores with drive throughs and putting even more emphasis on mobile orders. While I'm sure this will help them drive better efficiency, I'm not sure that it will solve the issues they have. There are plenty of places to grab a quick coffee. There are many small, wonderful coffee houses where you can still sit and relax with your coffee. The advantage Starbucks has is that you can find them everywhere and they had a good and consistent menu. They were comfortable.
Maybe in our stressed, overscheduled world we don't always want or need that much efficiency. Maybe sometimes we need to good comfortable place to go, where we can slow down a little and be around other people. Maybe that's worth paying extra for a cup of coffee!
As always, love your thoughts too! #futureofretail #customerexperience #topretailexpert