For the last three straight quarters, coffee-chain conglomerate Starbucks has reported declining sales, but the company’s CEO Brian Niccol shared during Starbucks’ quarterly call last week that something is brewing. Hoping that a few easy tweaks to its U.S. business strategy will reverse the downward trend, Niccol outlined more details during last week’s call—an ambitious and comprehensive recipe to turn Starbucks around.
These are Niccol’s plans to help the coffee giant’s sales rebound:
Ending the Chaos of Mobile Order and Pay
Currently, mobile orders account for more than 30% of Starbucks’ U.S. transactions. Yet, while coffee customers have grown accustomed to walking into Starbucks and seeing a crowded counter of mobile orders, the CEO wants to make some adjustments.
To help minimize mobile and in-person orders gathering together, Niccol said Starbucks is working to improve the timing accuracy of the app so that mobile customers know when their drinks are ready. Plus, Niccol wants to curtail how much customers can customize their drinks.
“Right now, I think there’s some customization specifically in the mobile order app execution that’s just really wide and unnecessary,” Niccol said.
Also curtailing customization options will be a drastic makeover to Starbucks’ menu, with Niccol stating the coffee chain needs to focus on “fewer, better” offerings that will also make it easier for baristas to make every drink consistently. While slimming down the menu may disappoint customers, Niccol believes they will be happier in the long run with more consistent and quicker service.
Creating the “Third Place”
Another move of the CEO’s “Back to Starbucks” plan is to make cafes more personal. He wants the Starbucks locations to feel like “third places” for customers to work and socialize—away from the chaos of the office or find space away from their homes.
It was this very concept that helped grow Starbucks into the global powerhouse it is today, but unfortunately, along the way, it has lost that reputation. Niccol plans to reintroduce the “third place” with more personal touches in Starbucks’ locations like serving coffee in ceramic mugs to customers who want to linger inside the cafes. Sharpies will also be making their triumphant return to your coffee cups, with the company saying bye-bye to printed labels.
“The reality is the majority of what we have are these cafes that I think don’t have the right seats, potentially have the right texture, don’t have the right layers, don’t have the right warmth. We need to bring that back,” Niccol said.
Welcome Back the Condiment Bars
After the early days of the global pandemic passed, Starbucks banished its condiment bars behind the counter, forcing customers who wanted to add milk or sugar to their drinks to ask the busy baristas directly.
But this will soon change, as Niccol stated the condiment bars will be reappearing to free up more time for baristas and ease customers’ frustrations.
Better Staffing
With the chaos of the mobile app and overly complex menu, Starbucks’ baristas don’t always have it easy. To help with turnover rates and ensure cafes are properly staffed, Starbucks has been increasing the average number of hours that it schedules baristas, creating more shifts and more consistent scheduling that have helped overall retention.
Niccol wants to ensure that Starbucks locations are properly staffed throughout the day, beginning with the busy morning rush.
A New Marketing Approach
Niccol has been clear that he wants to revamp the company’s marketing strategies since his first week on the job in early September, marketing to a broader audience beyond Starbucks Rewards members and highlighting the quality of Starbucks coffee.
Customers can expect to see fewer deals as a part of Niccol’s marketing strategy, but Starbucks’ customers finally won’t pay extra for dairy alternatives. This means that some customers could save more than 10% of the cost of their drinks, according to Starbucks.
While executives have acknowledged that customer pushback against higher prices is one reason why some customers have stopped visiting its locations, Starbucks hopes to improve consumers’ perception of its pricing by focusing on long-term customer satisfaction.
