Will mobile order and pay-only stores improve Starbucks’ operational performance?
Looking for ways to eliminate bottlenecks caused by the popularity of mobile orders, Starbucks will open a dedicated mobile order and pay-only store at its Seattle headquarters.
The location will only serve Starbucks employees who’ve placed via the Mobile Order and 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 seven percent of U.S. orders in the last quarter, up from three percent in the prior year. Those ordering receive an estimated time when they’re beverage will be ready and then either head to a pick-up location or hear their name called out by a barista at that time.
Wrote Andy Adams, senior vice president, global store development, Starbucks, last week in a note to employees, “An early experiment, this first of its kind experience will be tailored specifically for convenience and we expect to learn from this location.”
On its first-quarter conference call in January, Starbucks’ officials blamed long lines due to mobile orders for its weakest quarterly comp gain since 2009. The waits at its higher-volume stores at peak times caused some customers to walk out.
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.
While many retailers are investing in BOPIS (buy online, pick-up in-store), few are pushing pick-ups through apps.
In preparing to launch mobile order and pay this fall, McDonald’s is taking several steps to avoid Starbucks’ mistakes, according to a report from the Chicago Tribune. These include shortening assembly lines to accommodate greater volume during peak periods, adding kiosks for quick mobile scan, and adding dedicated curbside pickup.
- Starbucks to test mobile order and pay-only store at headquarters – Reuters
- Starbucks Nixes Cashier Counter in New Test Store Model – Eater
- Starbucks battles mobile pick-up congestion – RetailWire
- McDonald’s plan for mobile pay: Avoid Starbucks’ mistakes – Chicago Tribune
DISCUSSION QUESTIONS: Are mobile order and pay-only locations a wise idea for Starbucks? Will pick-up bottlenecks caused by mobile or online orders be largely a food/beverage headache or will it eventually become a big challenge across retail?