Get ready for more Starbucks pickup stores.
The Seattle coffee giant is accelerating plans to launch its new business concept for customers who pre-order with the Starbucks app.
Starbucks has tested the strategy in two Starbucks pickup stores in Manhattan and Toronto in the past seven months. But CEO Kevin Johnson announced today that the COVID-19 pandemic will help the company move ahead faster with its expansion strategy.
“While we originally planned to implement this strategy over a three to five year period, rapidly evolving customer preferences are accelerating the need for this concept and we are now planning to accelerate the development of Starbucks pickup stores in major US cities over the next 18 years Months, including retrofitting and repositioning many existing cafes, to expand our store portfolio with a mix of appropriate store formats, ”Johnson wrote in a business update for investors.
Johnson said the company is currently reviewing its stores "for renovations, moves, and closings" to accommodate changes in plans. Starbucks will reduce its new store opening plan and close up to 400 company-operated stores over the next 18 months, "in conjunction with the opening of a larger number of new, repositioned stores at different locations and with innovative store formats over time. ”
GeekWire tested the Starbucks pickup experience in New York City last December. Customers order items with the app, receive an estimated waiting time and collect their food or drink in a small place.
Starbucks introduced its mobile order-ahead app function (also known as Mobile Order & Pay) in late 2014 caught quickly with Starbucks Rewards members – so much so that the innovation created a congestion problem in stores.
Starbucks responded with special stations for mobile order-ahead customers that differ from the existing branch registers. The company also started using a new digital order manager. newly assigned employee roles; and revamped its store designs with mobile orders in mind.
The Starbucks pickup concept is the latest development in the order-ahead idea. In 2017, Starbucks tested a version of the employee pickup concept at its Seattle headquarters. And last July the company open The first Starbucks Now store in Beijing focuses on mobile orders and deliveries.
With Pickup, Starbucks can save real estate and labor costs while serving a significant portion of its customer base. More and more people are making themselves comfortable by ordering via smartphone.
The stores could also become a hub for supply contracts, much like Starbucks does in Beijing with Starbucks Now.
Now that physical distance is required, Starbucks pickup doubles to cope with the global health and economic crisis. Here's more of Johnson's note to investors:
“Our vision is that every major city in the United States will ultimately have a mix of traditional Starbucks cafes and Starbucks pickup locations. In the Starbucks Pickup stores, which are within walking distance of a traditional Starbucks café, customers can enjoy their Starbucks experience at a Starbucks café or pick up their order either at that café or at a nearby Starbucks pickup store . The Starbucks pickup stores offer more points of presence to better serve customers on the go while reducing the crowd in our cafes. This will improve the sit-and-stay experience for third place events. Regardless of the format, we know that the Starbucks “third place” experience takes place from the moment a customer imagines their daily Starbucks experience to the place where they enjoy that Starbucks drink. "
Starbucks, which closed stores in the US and Canada in the wake of the COVID-19 outbreak, reopened in early May and expects 90% of its US-owned businesses to be operational again this month, "with improved security protocols and changed schedules ".
Starbucks now anticipates that the pandemic will cause sales to fall between $ 3 and $ 3.2 billion in the current quarter. Shares fell more than 4% on Wednesday, but have risen steadily since falling in March.