Starbucks coffee shop in Krakow, Poland, February 29, 2024.
Beata Zaouzel | Photos of Beata Zaouzernur | Getty Images
Starbucks Cafes across the country are beginning to change the way they handle drink orders, including adjustments aimed at reducing bottlenecks and other long wait times that have plagued the chain.
The overhaul comes as the coffee giant prepares to handle an expected surge in orders through its mobile app.
At the center of the program is Starbucks’ “Siren Craft System,” a series of processes designed to simplify baristas’ jobs and speed up serving customers. Starbucks said more than 10% of its 10,000 stores have implemented the system, which includes changes to production orders for hot and cold drinks. According to the company, it will be deployed in North America by the end of July.
Executives hope the changes will give Starbucks a much-needed boost. In April, the company reported disappointing second-quarter results, with U.S. same-store sales down 3% and foot traffic down 7%. The coffee chain lowered its outlook for 2024.
Starbucks reports that the rate of unfulfilled orders on its mobile app is in the high teens and says there are fewer occasional customers. CEO Laxman Narasimhan mentioned the need for improvements in stores.
Katie Young, senior vice president of store operations at Starbucks, said in an interview with CNBC that the most immediate change needed for coffee shops is to better handle unexpected situations.
“It’s the ability to be flexible and respond to things we can’t predict,” she said.
Changes in stores will be key this month as Starbucks begins opening its app to non-rewards members on Monday, which the company believes will increase traffic and orders.
“My sense is that they have a lot of demand in certain stores and the kitchen floor space is small, you have to find ways to be more efficient,” said Peter Saleh, managing director of BTIG.
Losing customers due to slow orders and other store issues could cost Starbucks at a particularly vulnerable time. Faced with continued inflation, Americans have become more cost-conscious, in some cases cutting back on their morning or afternoon drinks and snacks. Narasimhan said in April that consumers were more cautious in spending.
In recent weeks, Starbucks has done something unusual and added $5 food and drink combo options. Communicating value to customers is also part of your business solicitation plan.
Kraken Crafting System
Young said Starbucks has been diagnosing bottlenecks for more than a year, since the company launched its reinvention plan in 2022. At the time, Howard Schultz was at the helm, returning at a time when the union movement was booming and consumer preferences were changing. The changes taking place at the cafe were first previewed this fall and will be rolled out over the next few years. Narasimhan will succeed Schultz in March 2023.
The Siren Craft System process was developed based on employee feedback about issues that were getting in the way of them making drinks and connecting with customers.
Starbucks plans to add an expediter-like role to its restaurant lines, a “caller” who leaves the line to help resolve jams in cafes and handle tasks such as refilling cups or providing assistance when unexpected crowds arrive. The company plans to train existing employees or add new baristas as needed.
“One of the pain points we see is that our espresso machines are often running all the time, which is one of the reasons why our partners are unable to check in. Another thing we see that you don’t notice is a must-know store Which part of the area is going to get crowded,” Yang said. “We actually needed a partner who would be focused on stopping production and helping out when things got busy.”
Starbucks will also change the order in which drinks are made. Before that, even if hot drink orders came first, cold drinks were prioritized from start to finish because espresso was the last step. This could cause traffic jams in a drive-thru restaurant, for example, if a person ordered one of each drink because the cold drinks were ready while the hot drinks were still being produced.
Macoy McGlaughlin, manager of First and Walker Starbucks stores in Seattle, said producing drinks in the order they are placed allows for a faster, more streamlined process.
“We actually have a proper sequencing between hot rods and cold rods, rather than the usual cold rod trend, to really give customers a consistent experience. So we actually make them in the order they come in. ,” McGlaughlin said, adding that cafes felt busier, but customers at stores and drive-thru restaurants were getting their drinks faster.
Baristas will also have more control over the company’s Digital Production Manager, an iPad system that controls order sequencing in various channels including cafes, mobile orders and drive-thru. Workers will have greater flexibility in changing order priorities.
Starbucks App Extension
Young said the changes to the app added a sense of urgency to the rollout of Siren training. She believes the store will be ready if foot traffic increases.
Third-party platforms will also support mobile ordering and payment to reach more customers.
Traffic and workload are likely to increase as some baristas have raised questions about staffing and scheduling over the years, particularly those seeking to organize with workers’ unions. Workers represented by the union consistently prioritize this issue during internal investigations and bargaining committee meetings.
Starbucks said it has made significant progress in staffing and scheduling over the past two years.
BTIG’s Saleh said the company has been unusually slow to move.
“The Siren system was first launched at Investor Day 2022 with Howard (Schultz) at the helm,” Saleh said. “Historically, Starbucks has never been slow to do anything. They move fast and find what they like. stuff and roll it out quickly.”
Siren Craft’s changes have “materially reduced” aspects such as order wait times, Young said. Starbucks said that in stores where the company uses the Siren Craft System to optimize operations, the number of customers served during peak hours increased, resulting in an estimated annual comparable sales increase of 1 percentage point.
“We’re very confident in the investment we’ve made in our staffing system and all the precision we can bring,” Yang said. “But no system or internal effort could have predicted that today, a group of high school students decided to gather all their friends and come over at 2 p.m., a time when we don’t typically see a lot of business.”
Other store changes include the slow rollout of new equipment under the same Siren name, including custom ice machines, milk dispensing systems and faster blenders to reduce barista steps and get drinks to customers faster. Investment in equipment will take many years, Young said. She added that the updated equipment, coupled with new training processes, has resulted in a significant return on investment. By the end of this year, ten percent of stores will be equipped with Siren devices.
Young said Starbucks wants customers to feel like wait times are better managed and that “even when it’s busy, everyone is in a good place.”
About The Author
