Smartphone ordering and long lines at Starbucks

An article in CNN Money (http://money.cnn.com/2017/01/27/investing/starbucks-long-lines-mobile-ordering-earnings/index.html) describes customer adoption of the Starbucks app to order and pay, but the consequent long wait to get their drinks.  The company expects over 30% of the orders at stores to move to mobile orders, but the long wait for delivery has been causing other customers to leave the store without purchase. The repeated reference to congestion in the earnings call on January 26, 2017 suggests the seriousness of the problem. Would offering mobile orders a delivery schedule for their drinks help smooth out queues ? Should customers be offered a delivery estimate before their mobile order to ensure fairness ?  Should there be dedicated capacity for mobile orders to prevent spillover to usual store customers ?

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20 Responses to Smartphone ordering and long lines at Starbucks

  1. Ross Ridge says:

    Would offering mobile orders a delivery schedule for their drinks help smooth out queues ? I noticed that more fast food establishments and restaurants have capitalized on using apps to order and pay. The challenge Starbucks has with offering a delivery schedule, is that if you order for pick-up and are late, your beverage gets cold. I have seen Panera Bread Company and others effectively use applications to pre-order with beverages and food waiting for them as they arrive, but those items are not generally served hot. It could work if you order right before you arrive; it would minimize your wait time (que to order), but people’s expectations change over time and soon, the wait to pick up your order will be perceived as “too long.” An element of unpredictability caused by customer surges still exists. My perception is that most Starbucks’ customers order beverages for take-out as they head to work and/or at peak times during the day. In this case, there will always be a wait no matter whether they order by app or wait in line to order.

    Should customers be offered a delivery estimate before their mobile order to ensure fairness ? I think this could help. People are more accommodating if they understand the wait time. There will always be those customers who determine that the wait time is too long, but most are willing to wait if they have a reasonable expectation of the delivery time. All you have to do is go to a busy restaurant on a Saturday night and be told that there is a 20-30-minute wait time to be seated. There will be some folks who believe this is excessive and leave, but most are willing to wait patiently for a table to open.

    Should there be dedicated capacity for mobile orders to prevent spillover to usual store customers ? This is an area where Starbucks and other vendors could decrease customer wait time. If they understand peak periods and customer flow, they could invest in an additional barista to assist and expedite orders, or cater to the orders placed by the mobile app. The bottleneck will still be the making of the coffee or expresso, but there are several folks who order cold drinks or plain coffee that does not involve much time to service.

  2. Henry Reed-Schertz says:

    Would offering mobile orders a delivery schedule for their drinks help smooth out queues?
    I believe that in theory absolutely if you compare Starbucks to other chains that are applying the same mobile orders you can expect to know when your food will be available or even set a desired time as to when you want to pick it up. I think that Ross poses a fair point that you might be dealing with a cold beverage on occasion. However, for the frequent customer 9/10 times being hot is something you can live with. By adding a schedule, it would be no different than a delivery service with hot or cold food. By offering a schedule Starbucks would give itself the opportunity to separate its customers once they were in the store to help mitigate the queues.

    Should customers be offered a delivery estimate before their mobile order to ensure fairness?
    I am not sure this fairness is the right word choice when deciding between standing in line or placing a mobile order. By offering a delivery estimate you are setting an expectation. This expectation is something that is provided as a benefit to those customers who are using the mobile app; while customers who are “walk-ins” can only judge the wait based on the visible line or conversation of other patrons (how long have you been waiting?). If Starbucks is able to help its customers by “setting an expectation” it gives them the opportunity to avoid back lash and frustration. This can be a benefit in multiple instances: peak times as mention in the article, or the day the store is short staffed and knows that wait time will be longer. It gives me as the customer the opportunity to decide if the double espresso is worth it or if I have the time to stop prior to making it to work or my next meeting.

    Should there be dedicated capacity for mobile orders to prevent spillover to usual store customers?
    As we have discussed process flow and bottlenecking I can only see this as a positive to have dedicated personnel available to manage the mobile orders. Obviously a store does not want to be over staffed and have wasted labor; but to dedicate a barista to the mobile orders free ups other employees to take care of the customers in store. You then have the opportunity to revert the individual working on mobile orders to in store tasks when the mobile queue no longer exists. We have reached the day and age of technology and it is not going anywhere, if anything it will become a greater part of our lives. So to avoid an opportunity in capitalizing on mobile orders as a company you would be doing yourself a disservice.

  3. Christian Kersten says:

    Would offering mobile orders a delivery schedule for their drinks help smooth out queues?
    Absolutely – comparing with other food chains you can find it in some places already. In nowadays society transparency is demanded by all customers – therefore you Starbucks should be transparent with it’s information about the delivery and provide all information. Giving a schedule would also be state-of-the art customers are already comfortable with due to food delivery services. The content-related proximity from food to beverages would be positively received by the customer.

    Should customers be offered a delivery estimate before their mobile order to ensure fairness ?
    If fairness means in this context that it will be considered how many people are in store and how many open online orders are already received to calculate the estimated delivery I would agree with that. In my experience a lot of profit-seeking companies would directly accept the offer and hazard the consequences of queues to make sales, but I’m pretty sure that this will not pay out in the long-run because of not satisfied customer needs and annoyance by the customer.

    Should there be dedicated capacity for mobile orders to prevent spillover to usual store customers ?
    It absolutely depends on the parameters. You have to consider arrival (offline/online) and service rate, number of servers (employees), average work-in-process-inventory and average lead time to figure out if this make sense. Based on that analysis you see peaks in queuing (e.g. mornings before work / after lunch time / after work in the afternoon) and you can think about possible countermeasures. The choices you have are based on your parameters from above (e.g. increase number of servers for peaks or improve average lead time, …).
    As a ‘educated guess’ I would assume that you have the queuing challenge mainly within the peak times – so you should focus on improvements there first. Maybe there is a possibility to control the demand… In general you want a coffee not in advance, you want it immediately. But if your order gives you back “delivery plan of 15 minutes, but if you take it in 30 minutes, you get a free flavour”, maybe people consider this offer and internally the process can be managed to minimize queues…

  4. Alyssa Bybee says:

    Would offering mobile orders a delivery schedule for their drinks help smooth out queues ?
    Seeing more and more businesses in the restaurant industry taking advantage of mobile orders/delivery apps is not surprising to me in the least, and I believe implementing a delivery schedule could really contribute to streamlining the process and smoothing out queues. Offering a more definitive way for customers to plan their schedules around pickup/delivery of their orders and at their convenience could boost the service experience and drive consumers to utilize, as Christian said, a “state-of-the-art” technology. Additionally, with the ability to notify customers of their order status like we’ve seen with many pizza delivery apps, customers are up-to-date and able to adjust to delivery/pickup delays with ease.

    Should customers be offered a delivery estimate before their mobile order to ensure fairness ?
    Offering a delivery estimate would be ideal, but would the estimate only consider those using the app or would it also include the other customers who chose the drive-up or to walk-in? Are there employees strictly dedicated to servicing customers utilizing the mobile app? These are questions to consider as far as “fairness” is concerned. One major issue I could see happening with this though, is that when customers are involved in the process there is opportunity for anger or frustration to occur when the timeline isn’t executed exactly “on time” according to their app, as expected. This could create more issues and customer complaints when inevitable mistakes are made, turning into a “you said my order would be completed by X time,” and for each minute the order is late, the customer has more ammunition and tangible “evidence” against the restaurant for poor customer service.

    Should there be dedicated capacity for mobile orders to prevent spillover to usual store customers ?
    Having dedicated staffing/capacity to the mobile delivery/pickup service would allow for more precise estimates, but this may not be the most cost-effective use of resources for all restaurants. I think this would depend on how much the service is being used and for what items. For example, if a sit-down restaurant has a pickup/delivery option, but most mobile orders are for smaller menu items or “quick bites” it may not make sense to dedicate staffing or capacity to that segment. Alternatively, for a restaurant like Starbucks or a coffee shop, where most menu items are quickly executed, a dedicated capacity would make sense.

  5. Beth Hinchee says:

    Would offering mobile orders a delivery schedule for their drinks help smooth out queues ?
    A delivery schedule could help smooth out queues if there was a back office IT system that would present all orders to the baristas in the most optimal order to minimize customer wait time. Alternatively, geofencing could be used to enable the order system to recognize when an app customer has entered the property, and then present the order to the barista for preparation according to the optimal queue schedule.

    Should customers be offered a delivery estimate before their mobile order to ensure fairness ?
    Rather than offering a delivery estimate, it might be helpful to present the app customer a view to the current queue time at the store they are looking to order from (as well as suggest other neighboring stores with shorter queues). Providing a histogram illustrating peak queue times could also be helpful (some web searches show that for restaurants and stores). That would give the customer the opportunity to self-select to a time/location that was less busy. I certainly agree with Alyssa that the last thing you want to do is set unrealistic expectations with customers for “on time” delivery.

    Should there be dedicated capacity for mobile orders to prevent spillover to usual store customers ?
    This seems to be less of an issue of mobile vs walk-up orders and more of an issue of how to address the bottleneck during peak hours. Their volume has gone up, and they should investigate ways to peak-shave (by incentivizing customers to divert their business to a slower time of day or a less busy store), add capacity in their current bottleneck to handle surges, or improve bottleneck throughput via efficiency improvement. Surely there are parallels to the drive-up window vs counter-service models that could be leveraged learning, too.

  6. Nicholas Vandal says:

    Offering mobile orders a delivery schedule or estimate may help smooth out the queues but it may help smooth them out for many of the wrong reasons: it might just drive customers away. For example, if you are ordering a coffee or latte on your way to work and the app says that you are 20th in line and your wait is 15 minutes you might just decide to try dunkin donuts or another coffee shop instead. It could help smooth out the process and speed up times as my colleagues have stated though as well.

    I think there should be a dedicated queue for the mobile orders vs. in-store regulars as to not disenfranchise either group. Currently, by having the two different order groups queue together, Starbucks is only slowing down the overall process. The videos and readings teach us about how having one queue (the serpent style) go to many checkouts can increase capacity more than the sum of the parts (when the 2 university ladies work together rather than separate their combined efforts increases capacity beyond the sum of what each did individually).

  7. Aaron Wheadon says:

    Would offering mobile orders a delivery schedule for their drinks help smooth out queues? I think it would help smooth out queues. Some companies like Walmart are using customers GPS coordinates to help their employees anticipate when a customer will arrive, in addition to giving a pick-up “window.” I believe this has made a huge difference in customers ability to pick-up on time and increasing satisfaction with Walmart’s service levels.

    Should customers be offered a delivery estimate before their mobile order to ensure fairness? I’m not a huge subscriber of fairness, so anytime I see or hear the word, I seem to automatically want to think/say, “Who said life is fair?” However, offering an estimate of when the order will be ready should be a given. Many other companies, like Domino’s, FedEx, Walmart, and more offer a delivery estimate. Starbucks should step up and at least do what the is the minimum expectation from their customers.

    Should there be dedicated capacity for mobile orders to prevent spillover to usual store customers? I would suggest that best practice, if they want this to be successful, would be to analyze peak times of customer arrivals and when they should have more employees on site to manage.

  8. Brad Wensel says:

    Would offering mobile orders a delivery schedule for their drinks help smooth out queues?

    I personally believe offering current wait times or delivery schedule for their drinks would help at Starbucks. One of the challenges I see when walking into a Starbucks is that many people don’t place their drink order on the app until they are in the parking lot or walking into the store. However, if people start to understand the time from order to ready for pick up they might start to not arrive and then order, which I see as causing much of the lines in Starbucks. Starbucks could take the approach that Domino’s rolled out with showing you exactly where your food was in the preparation process. Could that be done with Starbucks? Overall, more visibility to the delivery schedule would help.

    Should customers be offered a delivery estimate before their mobile order to ensure fairness?

    I think this is fair to show the wait time as their drinks could be delayed because of people in line at the store. There is a mindset that mobile ordering is faster but depends on how in advance you order it before you arrive to the store and how big of line there is currently at the store. Many times, the line inside Starbucks is very small compared to the drive through or mobile ordering. So, visibility not only after you place your order into the delivery schedule, but estimated times prior to placing the order I think could help ease consumer frustration and streamline the process.

    Should there be dedicated capacity for mobile orders to prevent spillover to usual store customers?

    This is something I do think Starbucks should consider. They should have a dedicated area to make mobile order beverages. The challenge with this is you need more equipment and potentially more staff, which could be cost prohibitive. However, could this approach be used during peak hours. if the costs can’t absorb this labor and equipment costs a better process to find your mobile order is needed. People spend time talking to the baristas trying to see which one is there even when they have names on it. If it isn’t made yet they will interrupt the person making the coffee, which slows done the process. Overall, if mobile continues to grow and Starbucks can increase their business by adding a dedicated line for mobile orders it could be beneficially to take on the additional costs to increase capacity and not have customers turned away to a competitor.

  9. Sarah C says:

    1. Would offering mobile orders a delivery schedule for their drinks help smooth out queues?
    It could help smooth out queues in so far as people would go to another coffee shop to indulge in their coffee rather than wait for Starbucks.
    In some Spanish, Finnish and UK hospitals patients can check the length of wait in the Emergency Department so they can decide a) do they really have an emergency that needs to be treated and b) if they really do need to come in, they can choose to go to another hospital with a shorter wait. By having this system in place it has helped to deter those ‘patients’ who do not really require emergency treatment. It also helps distribute the influx of patients more evenly throughout the system/ other hospitals rather than patients just going to their nearest hospital.

    2. Should customers be offered a delivery estimate before their mobile order to ensure fairness? How is fairness being measured and who is ensuring this so called ‘fairness’ is being upheld. I think you could give people an estimated time, but you can’t give a definitive time.

    3. Should there be dedicated capacity for mobile orders to prevent spillover to usual store customers? I think during peak hours it would probably cut down waiting times to have certain team members dedicated to the online orders. This would help to stop the whole team from getting snowed under from coping with both in-house and online orders.

    One a side note as a complete non coffee drinking person and someone who believe that companies such as Starbucks who do not pay adequate tax… can we put this into a bit of perspective? I don’t really understand what the issue is with queuing up with everyone else to get your morning coffee (tall, decaf, no foam, extra hot latte with an added shot – I have no clue what any of that actually means, and coffee orders completely baffle my brain) – do you really need an app for that?
    Perhaps this app should just be for people who have jobs which require them to be really quick when they are on shift such as firefighters, paramedics, nurses etc.?

  10. Jesse Kiste says:

    Would offering mobile orders a delivery schedule for their drinks help smooth out queues ?
    Yes, adding the delivery schedule could naturally smooth out their peaks but customers using less busy times or locations. I like Beth’s idea of geofencing (tracking when a customer with the app arrives), but this might scare some people off with the feeling of “Big-Brother”.

    Should customers be offered a delivery estimate before their mobile order to ensure fairness?
    As a customer, in the world of online ordering, I think it is completely fair to give an estimated time before an order is submitted. I think it would require the customer to put in what they want to order (a black coffee and a pumpkin spice latte have two different run rates.) For my haircuts I use a place called Great Clips, before signing in online you can see the estimated wait time at each store location. Once signed in, you can continue to check the status of your appointment. Jimmy John’s is another good example where you can track the order. It does not give an estimated time, but you can see when the order is received, started and leaving the store to deliver to your location.

    Should there be dedicated capacity for mobile orders to prevent spillover to usual store customers?
    I don’t think there should be a cap on mobile orders, but by adding the wait time pre-online order, it might divert online customers to use different times or different locations. It think a bottleneck study is needed per store to understand the needs of the customer. If you have a queue system that optimizes orders, the more mobile orders might be a benefit (example: If you were to batch make orders…hold the online order latte a few more minutes in hopes an in store customer will order one and two can be made at once.

  11. Lindsey Minto says:

    Would offering mobile orders a delivery schedule for their drinks help smooth out queues ?
    There is a huge opportunity to add technology to create efficiencies in the ordering process. Similarly to how Uber can create pooled rides to maximize the efficiency of a route, Starbucks should be able to predict and stage orders. Whether it is understanding someone’s location in relation to the store, or presenting baristas with like orders to cut down on bottlenecks like milk heating or blender time. The amount of data they collect with each transaction, especially mobile, is ripe for innovation and optimizing the wait times.

    Should customers be offered a delivery estimate before their mobile order to ensure fairness ?
    To ensure customer satisfaction, Starbucks should provide a delivery estimate before the customer places their order. Imagine thinking it would take less than 5 mintues and then paying for your item, not being able to get it refunded and realizing it is instead going to take 15 minutes.

    Should there be dedicated capacity for mobile orders to prevent spillover to usual store customers ?
    There should not be differentiation between in store vs mobile customers. There is data that should be collected to better learn what the cadence of orders is, and how to realize efficiencies with bottlenecks such as milk heating. As the company gets more information on ordering patterns and preferences, there is an opportunity to streamline the process for both instore and mobile customers.

  12. Marcello Sanzi says:

    Would offering mobile orders a delivery schedule for their drinks help smooth out queues?

    As Brad mentioned a lot of the customers don’t make their orders until they arrive at the parking lot and I do feel most of the companies give the impression that if you order through the app your order will be placed upfront. However, letting the customer know a delivery schedule before placing their order will smooth things out by letting them know the specific time wait for the drinks to be ready and as a result would smooth out the queues and customers would have more information to plan on ordering by having the information on when their coffee order would be ready.

    Should customers be offered a delivery estimate before their mobile order to ensure fairness?

    Giving this type of information is a must to make the process smooth. Starbucks might miss a sale or two with this information but it would be best for the future business. Since Starbucks is applying more and more the digital applications I do believe trying to make the process smoother could be the key for success and prevent customers to have a bad experience and not using the online tools or losing a customer.

    As I have mentioned before I do believe that by informing the estimated delivery time customers could plan on when to place the order and make their schedule work. If Starbucks surprises the customer with a wait while they are thinking their coffee should be ready, the bad experience could lead to customer dissatisfaction and as a result Starbucks could lose the customer.

    Should there be dedicated capacity for mobile orders to prevent spillover to usual store customers?

    Yes, a better way to face this situation would be for example adding dedicated baristas just for the on-line ordering or another option would be transferring staff during peak hours to another section so that Starbucks doesn’t lose in store customers’ sales or apps sales.

  13. Enoch Obeto says:

    Would offering mobile orders a delivery schedule for their drinks help smooth out queues ?
    I believe this will be helpful, it’s already the practice in other consumer businesses, so if Starbucks chooses to go in this direction they will only be meeting a basic societal expectations, it won’t be anything extraordinary. When I order for food on Ubereats I’m given a delivery schedule, this helps me make proper plans and be ready when the food arrives. In the case of Starbucks, if I don’t have a schedule of when my coffee will be ready, I’ll then have to go into the store to queue up, which results in the congestion they talked about. Delivery schedule will regulate customer arrival at the stores, and will help smoothen out the queues.

    Should customers be offered a delivery estimate before their mobile order to ensure fairness?
    I support this 100%, again this will not be groundbreaking, it’s already been done in many consumer businesses. When I call for Uber, I’m given an estimate of the fare before confirming my request for service. When I walk into a restaurant, I’m given an estimate of the wait times, and based on how much time I have, I can choose to wait. Same thing when I order for pizza, I’m given an estimated arrival, and I get to decide whether to wait or not. This should be a no-brainer for Starbucks as well.

    Should there be dedicated capacity for mobile orders to prevent spillover to usual store customers ?
    This is another point I have to agree with. In the days of drive-thru windows at fast food restaurants, they have separate dedicated staff for the in-store as well as the drive-thru customers, otherwise you’ll have the chaos Starbucks is experiencing today. This also reminds me of my recent experience at a local restaurant, they had to stop taking in-store orders because they got overwhelmed by online orders. The restaurant had no dedicate resource for online orders, and in one of those days when people wanted to eat-in they got flooded with E-orders. The experience was very annoying and disappointing for me, and I therefore recommend that Starbucks should consider this idea. We now live in a mobile world, and online ordering is our new reality and it’s here to stay.

  14. Alan Cottrill says:

    Would offering mobile orders a delivery schedule for their drinks help smooth out queues?

    I think offering mobile order customers is a good idea on several levels. It helps establish customer expectations, as Lindsey and Brad mentioned, in providing the customer with an expected time the order is ready vs walking in from the parking lot and expecting their drink before customers who’ve been in line for 5 minutes before they placed their order as an example. In addition it would also seem to provide them with more information and tools to manage orders and staffing.

    Should customers be offered a delivery estimate before their mobile order to ensure fairness?

    To me this goes hand-in-hand with the first question and in my mind is an absolute requirement as Marcello mentioned. In addition to benefiting Starbucks for planning and operations it helps customers made decisions and creates, in the end, a better customer experience.

    Should there be dedicated capacity for mobile orders to prevent spillover to usual store customers?

    For me I think this is a business decision for Starbucks vs fairness to “usual store” customers .. what is usual anyway? The norms/usual processes are changing daily. I think starbucks, and others, have to prepare for the future growth of mobile orders and how they staff and manage their business needs to account for it. In reality this has been happening for years in drive thru fast casual restaurants … drive thru customers, from my perspective, have always received service first before customers in queuing up at the counter.

  15. Linda Sverdrup says:

    Jazzy Java Jive
    I love coffee, I love tea
    I love the java jive and it loves me
    Coffee and tea and the java and me
    A cup, a cup, a cup, a cup, a cup (ahhh!)

    Would offering mobile orders a delivery schedule for their drinks help smooth out queues? It could possibly, however, I like Beth’s Geofencing idea combined with an auto-geo-locator technology where it automatically switches in the queue, the closest customer by projected arrival time. Some folks get stuck in traffic, then their order will be delay — making their coffee hot and fresher upon arrival. They could also deliver orders via a cart outside in the parking lot, to alleviate congestion. I would focus on this technology and offer delivery option only as a backup.

    Should customers be offered a delivery estimate before their mobile order to ensure fairness? By “delivery estimate” I am assuming this refers to when an order is ready for pickup, not an actual delivery. This could go hand-in-hand with the projected arrival time and projected ready for pickup. This should be automated seamlessly through the app. Now if volume throughput is the actual issue, as the article referred to, Starbucks needs to increase the capacity of the store to meet the demand. Chasing delivery schedules, is like chasing your tail. Fix the capacity issue to meet the demand 1st.

    Should there be dedicated capacity for mobile orders to prevent spillover to usual store customers? There are several way to view this issue. It depends on the actual capacity gap or shortfall. Starbucks could invent a mobile barista unit, that could temporarily go to high demand areas during high volume traffic times. An actual dedicated mobile order barista for in store may work, but would not be my go to position. I would need more data to support this. Someone in house, should receive their coffee always within a set timeframe, such as 3-5 minutes. Starbucks needs to meet demand by increasing their capacity. Bottom line: an order is an order with a queue. You have to wait for your turn. Posting projected ready for pick up times both in store and via an app will provide an expectation to customers. Customers may then decide whether they can afford the time to wait for their cup of java jive.

  16. Jessica Heaton says:

    Would offering mobile orders a delivery schedule for their drinks help smooth out queues ?

    In today’s environment offering convenience is not considered a luxury, but a necessity if companies want to remain competitive and meet customer needs. Specifically for customers that would like to pick up their coffee each morning on the way to work, being able to schedule it to be ready at “7am” would not only reduce queues by allowing the business to better plan orders in advance, but it also provides a better/easier customer experience.

    Should customers be offered a delivery estimate before their mobile order to ensure fairness ?

    Again, I think this would be to the benefit of the business and the customer to offer delivery estimates. By using technology and data analysis you may be able to better predict peak times and more accurately provide estimates to customers. This would allow the customer to show up around the time of their order reducing the queues and congestion that is caused. Even when the order line seems to be moving quickly, sometimes the sheer number of people is enough to dissuade customers and change their mind about ordering. If Starbucks is able to reduce some of the congestion by providing accurate deliver estimates, I think this would be valuable for customers and the business.

    Should there be dedicated capacity for mobile orders to prevent spillover to usual store customers ?

    I would say the need for dedicated capacity for mobile orders would depend on the store and the trends of their customers. If the data analytics show that mobile orders peak between certain hours, days, etc. then they need to be able to accommodate that. The point of using a mobile app to order is for convenience, if you’re not able to properly support that function then customers will stop using it.

  17. Vivek Chakrabortty says:

    Would offering mobile orders a delivery schedule for their drinks help smooth out queues?
    Yes, it will. As Nick pointed out in his comment, it will turn away customers if they delivery schedule is too far out. From an operations perspective, it will help to smooth out queues by setting customers’ expectations and aligning arrival time with the production capacity. However, I expect this to come at a cost – loss of revenue in the short-term and loss of customers in the long run.

    Should customers be offered a delivery estimate before their mobile order to ensure fairness?
    It is unfair to treat one group of customers with a delivery estimate. However, the objective is to drive higher mobile orders then it is a good incentive to provide delivery estimates. Another option would be to adopt a model similar to what McDonalds is doing. At McDonalds, all orders being processed are shown up on a digital board. Customers see where they are in the production line based on order number. Customers entering the store can look up at the board and decide whether they should stay or choose another restaurant. This is very helpful at high volume locations and while customers may choose to go to another restaurant, they appreciate the transparency.

    Should there be dedicated capacity for mobile orders to prevent spillover to usual store customers?
    Yes, this would be another version of drive-thru. Starbucks could even charge a premium for this type of “no wait” pick up service. Having dedicated capacity for mobile orders may only be cost-effective in high volume stores.

  18. Steven Jones says:

    I can understand why Starbucks is driving customers to the app for placing orders, it’s a method to add capacity to the ordering system. Unfortunately, the ordering system is not the only issue to address in the queuing issue – and Starbucks knows it. They have been looking into methods to add capacity to the delivery system. The questions in this blog seem to address a few operational options that could be open to Starbucks, but they don’t address the central issue Starbucks is dealing with: the fact that there isn’t enough uniformity in their stores to have an easy one size fits all solution. To address variation in their store configurations, Starbucks introduced the phone application to provide added capacity to the ordering system. (Starbucks also introduced the phone application to capitalize on the payment process – but that is not addressed in this blog.) Interestingly, Starbucks found out that the capacity added to the ordering system created a bottleneck out of the delivery system.

    As for the first two questions concerning delivery schedules or delivery estimates, these items don’t work for Starbucks’ market. Some of my colleagues brought up Panera as a comparable situation. Panera has successfully introduced both delivery estimates and a delivery schedule for both in-store pickups and out of store deliveries. However, Panera’s throughput is much longer than Starbucks’ and has more steps in the process than Starbucks does. Additionally, the coffee on demand market is much different than the meal market. People expect to wait a little longer for a meal to be produced than for a coffee to be made. Therefore, to create a schedule for delivery doesn’t meet Starbucks’ market.

    Delivery estimates might be a close second – but more like a close second to last to implement. How would Starbucks implement this solution? Gather data for a month on different stores and build an averaging model to write into an algorithm that can estimate a delivery time? That is impractical. One person might order 1 drink while another might order 5. Add to this variability, the variability in the time to make drinks. One drink might be a drip coffee another might be a mix drink while another might be a pour over. Additionally, add to this the variation in machine downtime, length of time it takes someone to order, drinks made wrong, consoling an upset customer, a partner (employee) not showing up to work, etc. Again, Starbucks doesn’t have the market that supports this kind of process. Mabe a haircut place could employ this kind of process, but the coffee on demand market is not a good match for delivery estimates on mobile application orders.

    The last question is fantastic – and the one that Starbucks actually ended up implementing. Adding dedicated capacity for mobile orders has actually improved wait times due to mobile ordering. For one, adding one more partner to the relative stores during peak hours is much cheaper than trying to have headquarters work out a solution Plus, Starbucks has started to enhance their market differentiation: warm presence of the staff. Starbucks is taking this very seriously, both through measurement via the app with surveys, and incentivization to the partners. Adding one more smiling face is a marketing tactic that Starbucks is more than willing to invest in – especially considering bad experiences in the store with partners can drive customers away. Additionally, having dedicated capacity – like adding a second machine if there is space or a special pick up area just for mobile orders endears loyalty to Starbucks. Starbucks takes loyalty very seriously as the mobile app and the card system rewards loyalty through incentive programs, games, and free birthday drinks.

  19. Vinod Reddy says:

    Would offering mobile orders a delivery schedule for their drinks help smooth out queues ?
    Introduction for technology into food/beverage industry is common. Starbucks may be new to this but others not. Pizza get delivered in 30 mins and that to hot. So adding mobile orders helps and also barista team gets clear picture of incoming orders.

    Should customers be offered a delivery estimate before their mobile order to ensure fairness ?
    Mobile app should provide the estimate time for delivery of coffee. its simple feature should be available.

    Should there be dedicated capacity for mobile orders to prevent spillover to usual store customers ?
    this is where Starbucks will face real challenge. Based on the arrival rate of Mobile order and starbucks store customer, its important to check how many servers can handle the flow. this data should be available as there are certain peak hours, high line for beverage to be served. Taken into that consideration, Ideally its better if there is separate service station for mobile orders and keep processing it. If its low on orders it can service store customers. Also mobile customers should provide the time for beverages required. this would better channeling of orders.

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