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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10 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.

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