Starbucks CEO Breaks Down the Company's Biggest Problem and How to Fix It | WSJ

Summary

Starbucks CEO Brian Niccol is leading efforts to revitalize the company by focusing on improving the customer experience. His strategy includes enhancing mobile ordering systems to reduce wait times, restoring the in-store coffeehouse vibe with comfortable seating, and refocusing on quality service over cost-cutting. Niccol has also implemented a new code of conduct, addressing safety concerns and customer behavior, and plans to empower baristas with more autonomy. With a clear vision of connecting customers to the brand’s values, Niccol aims to make Starbucks a more efficient, welcoming, and beloved experience.

Takeaways

• 😀 Brian Niccol, Starbucks' new CEO, is focused on identifying what makes the brand magnetic and delivering that consistently.
• 😀 Starbucks is currently in a slump, facing rising coffee prices, long wait times, and lagging sales.
• 😀 Niccol believes Starbucks' problems stem from prioritizing cost-saving over customer experience.
• 😀 Customers have criticized the Starbucks experience due to loitering in free-to-the-public bathrooms and long wait times caused by mobile orders.
• 😀 Niccol plans to revamp mobile ordering and store layouts to improve customer experience and reduce wait times.
• 😀 A key issue with mobile orders is that customers often receive unrealistic time estimates, leading to frustration.
• 😀 Starbucks is working on improving the sequencing of mobile orders to reduce wait times and allow customers to enjoy their beverages in-store.
• 😀 Niccol has implemented a new code of conduct to address safety concerns and ensure a better store environment by limiting free access to stores and bathrooms.
• 😀 Baristas have expressed concerns that new policies, like adding a personal touch on orders, may slow down service but also provide meaningful connections with customers.
• 😀 The company aims to bring back comfort and a better in-store experience by reintroducing furniture and redesigning store aesthetics.
• 😀 Niccol stresses the need for balance in Starbucks' strategy, emphasizing mobile ordering, drive-thru, and rewards while maintaining the integrity of the brand.

Q & A

What is the main issue Starbucks is facing, according to the new CEO, Brian Niccol?

Starbucks is facing a slump, with rising coffee prices, longer wait times due to mobile orders, and lagging sales. Niccol believes these problems stem from a focus on cost-saving instead of delivering a positive customer experience.

How does Niccol plan to improve Starbucks' service speed, particularly regarding mobile orders?

Niccol plans to improve speed by optimizing mobile order sequences using technology, allowing baristas to create drinks in about four minutes or less. This would help manage the volume of orders more effectively.

Why is fixing the algorithm for mobile orders a priority for Starbucks?

The algorithm needs to be fixed to better sequence the orders. Currently, mobile orders sometimes promise delivery times that are not feasible, causing customers to abandon their orders due to long wait times. A better system will improve customer satisfaction and reduce wait times.

What new code of conduct has Starbucks implemented, and why?

Starbucks has introduced a new code of conduct ending the policy of allowing free access to stores and bathrooms regardless of purchase. This change was implemented to address safety concerns and maintain a respectful environment for both customers and partners.

What feedback has Starbucks received regarding the new code of conduct?

The feedback has been mostly positive, with both partners and customers appreciating the approach. It ensures that customers who use the store’s facilities are purchasing something, which supports a fair environment for everyone.

What is the rationale behind the decision to bring back the condiment bar in Starbucks stores?

The condiment bar is being brought back to speed up service and allow customers to customize their drinks on their own. This gives customers more control and helps baristas focus on making drinks, ultimately improving efficiency.

How does Starbucks plan to restore its store environment, particularly the seating areas?

Starbucks is working on bringing back comfortable seating and furniture that was removed during COVID for safety reasons. This restoration aims to create a welcoming atmosphere for customers to relax and enjoy their experience in-store.

What does Brian Niccol believe Starbucks lost focus on in recent years?

Niccol believes Starbucks lost focus on the crucial moment of customer connection. The company became too reliant on mobile ordering and drive-through options, losing sight of the experience customers seek when they visit Starbucks.

What experience does Brian Niccol bring to Starbucks from his previous roles?

Niccol brings experience from brands like Scope Mouthwash and Chipotle, where he learned the importance of making a brand magnetic and delivering a consistent, quality experience to customers. He is applying these lessons to revitalize Starbucks.

What specific goals does Niccol want to achieve at Starbucks in the next year?

Niccol aims to ensure that everyone understands the Starbucks brand, focusing on the craft, quality, and care in every step of the process. He also wants to fix mobile ordering, making it an advantage for the company, and restore the in-store experience with a welcoming environment and comfortable seating.