Starbucks Caters to a New Digital Age: Leaving Outdated Store Models in the Past

Uncomfortable seating, pick-up-only locations, and an increasing number of drive-throughs are reasons Starbucks’ customers have been pushed out of the in-store seating model. For decades, Starbucks took pride in its business model. Providing free Wi-Fi and sofa-like seating in every store helps coffee enthusiasts catch up on work, socialize with friends, and enjoy a “third place” between home and work.

Starbucks built its entire brand on providing this unique experience and being that “third place.” This allowed Starbucks to edge out its competitors who sold coffee at cheaper prices [1].

Today, 70% of Starbucks stores have a drive-through option, a 55% increase since 2005. Mobile ordering, implemented in 2014, became popular during the pandemic. In 2020, mobile ordering increased from 17% of sales to 26% of sales. The 30% of sales that mobile ordering makes up today encourages Starbucks to have an in-and-out culture, thus discouraging customers from sitting down to have the experience the company’s founders intended [2].

Students at the University have enjoyed the luxury of mobile ordering and the increase in drive-throughs around the grounds. “I love how easy using the Starbucks mobile app is.” Libby Yoon, a third-year student at the University, said “I don’t have to spend time talking to anyone and can just grab my fuel for the day.”

During Starbucks on the corner’s “rush hour” (Monday through Thursday from 8:30-10:00 A.M.), I observed the influx of mobile orders placed as the baristas continuously shuffled between making a coffee and setting it down on the counter for customers to come in and grab it on their way to class. Very few people came into the store to stay.

The baristas in the stores, however, struggle to keep up with the influx of orders. “we would have to turn mobile order off sometimes when the drive-thru was too busy, or we were short-staffed,” Josie Drumheller, a student and former barista at the Charlottesville Starbucks on 5th Street, said. “There were times when we’d be receiving mobile orders 15 minutes after they were placed because so many tickets were trying to print at once.” In some stores, 40-minute wait times make national headlines, causing Starbucks to lose customers as they can opt to make themselves a cheap coffee in 5 minutes at home.

Starbucks has embraced its fast-food restaurant status in many ways. Its menu items are not solely for coffee drinkers anymore. It sells lemonade, energy drinks, and special drinks like boba. They’ve expanded their food menu to include to-go lunches and utilize the mobile order app to create challenges and reward customers with stars that count towards a free drink.

The future of Starbucks lies in increasing customer efficiency. Starbucks aims to alleviate system back-ups that leave customers who placed mobile orders waiting. Starbucks is also ditching the old store model and opening 2,000 mobile-order-only stores across the country. Starbucks prefers this method and the drive-through method as it allows them to cut labor costs and increase order quantity [3].

Perhaps the audience that Starbucks initially catered to is not the same one they sell to now. They’ve shifted their attention away from maintaining authenticity and towards preserving profitability.

All content is the intellectual property of the Virginia Undergraduate Business Review.

REFERENCES

[1] Meyersohn, N. (2024, July 19). A major shift at Starbucks is changing its personality | CNN business. CNN. https://www.cnn.com/2024/07/19/business/starbucks-mobile-orders-third-place/index.html

[2] Mieleszko, A. (2024, August 7). From hang out to hurry: Why Starbucks wants to redefine “third place.” Strong Towns. https://www.strongtowns.org/journal/2024/8/2/from-hang-out-to-hurry-why-starbucks-wants-to-redefine-third-place

[3] Zilber, A. (2024, July 1). How Starbucks responds to gripes about 40-minute wait times with new system. New York Post. https://nypost.com/2024/07/01/business/how-starbucks-is-responding-to-gripes-about-40-minute-wait-times/

[IMAGE] Via jannoon028 on Pinterest https://www.thekitchn.com/reddit-tip-starbucks-drive-thru-faster-256520