Last week, Starbucks announced that they’re appointing Brian Niccol as their new CEO – the fourth CEO at the helm of Starbucks in four years. The last several years have seen more trouble than just executive turnover for Starbucks, as the coffee retailer has been in the news near constantly for various missteps. Brian Niccol, the executive who led the brand revitalizations of both Taco Bell and Chipotle, has been brought in to turn Starbucks around, and in his own words, “get back to what makes Starbucks, Starbucks.”
To understand the changes Niccol wants to make, we need to look at the brand climate he is entering. Perhaps most notably, in 2021 workers at a Buffalo location of Starbucks unionized, instigating unionization efforts for Starbucks employees across North America. Starbucks’ obstinate anti-union stance and potentially illegal union-busting efforts have gone on for the past 3 years, with none of the three previous CEOs making significant inroads to meet the workers’ demands. This discord had followed the major financial setbacks caused by the COVID-19 pandemic and was capped off with a headline story of discrimination that went on from 2018 to 2023, in which the coffeehouse was found guilty.
But it’s not just bad press that has eroded the public opinion of the coffee giant. More than anything else, it is likely the constant increase of prices that has desecrated the loyalty of longtime fans. Prices have been steadily rising for years, much like other brands, but without any added value. Tack on the idea that it is a potentially political statement to dine at Starbucks these days, customers are unlikely to risk a long line or an incorrect order: it’s just not worth it anymore.
In Brian Niccol’s open letter to Starbucks’ partners, customers, and stakeholders, he outlines his initial plan on how to breathe new life into the brand. We examined his plan to improve the customer experience in Starbucks’ stores and offer some additional insights on how these methods could be taken a step further to create the experiences modern customers are looking for.
1. Empowering our baristas to take care of our customers
Aside from the obvious move of working with the existing unions who have been negotiating well-researched, specific demands to improve their employee experience, there are several ways Starbucks could empower their frontline workers. Speed and efficiency are the key tenets of service in high-volume coffee shops, and frontline workers need to be able to make decisions quickly. Allowing all workers to be able to authorize free products and discounts goes a long way in building back customer goodwill.
Conversely, having to wait an additional 15 minutes for a coffee so that a barista can track down and speak to a manager, can be a frustrating experience that may send customers into the arms of a smaller, local chain. When it comes to empowerment, Starbucks can afford to take it literally: give more autonomy to the people who understand the business best.
2. Get the morning right, every morning
By this, Mr. Niccol simply means, “delivering outstanding drinks and food, on time, every time.” For customers, it is refreshing to hear a commitment to this core aspect of service. We know that the Amazon effect, or the idea that all service should be as rapid and seamless as Amazon delivery, has recalibrated expectations for customer service across industries. And he is certainly aware that efficiency and accuracy are the values that drive this industry, and anything else should come second to these priorities.
There are different ways to approach a re-centering on fast, correct orders. Removing less popular menu items could simplify the ordering experience (both online and in person) and reduce the risk of employee error in preparing each order. For a coffee shop, Starbucks currently has an extensive menu of hot and fresh options, shelf stable pastries, and refrigerated food items, on top of a diverse array of beverages. Starbucks frequently refreshes the menu and rolls out new offerings, while also abiding to the regular rotations of their seasonal products. Maintaining such a dynamic, complex menu with a workforce plagued with high turnover almost guarantees friction in the customer experience. Ensuring employees are prepared for new launches and empowered to deliver is critical to achieve this initiative.
3. Reestablishing Starbucks as the community coffeehouse
Starbucks used to be considered a “third place” – a place where people can gather to socialize and actively participate in their community. Nowadays, 70% of Starbucks orders are mobile orders, meant to be delivered to the customer as quickly as possible. Mr. Niccol plans to transform Starbucks stores into a hybrid of these places, as “inviting places to linger, with comfortable seating, thoughtful design and a clear distinction between ‘to-go’ and ‘for-here’ service.”
As much as our society is in dire need for more gathering spaces and community, is a return to the aesthetics of Starbucks’ past really the best way to go about it? It is unlikely that customers who appreciate the speed of a mobile, to-go order will see comfortable seating and linger around the store. If Mr. Niccol is adamant on transforming Starbucks back into a third place, he should empower managers to connect with groups, charities, and organizations in their local communities to actually use Starbucks stores as gathering places, something many chains and franchisors are reluctant to accommodate for fear of political ramifications.
4. Telling Our Story
Brian Niccol caps off his open letter with a promise: “We won’t let others define who we are.”
If you can’t remember the last time you saw a Starbucks advertisement, you’re not alone. Starbucks relies heavily on the brand awareness of their brick-and-mortar stores for their marketing. As influencer marketing has established itself as a major player in the fast food and fast casual space, numerous savvy influencers have co-opted the Starbucks brand, sharing “their own” drink concoctions, and effectively co-opting the brand’s story.
Further, Starbucks' response to the legal troubles and poor PR has been in the form of formal press releases and statements. This brand is clearly overdue for a refresh, and Brian Niccol has made it one of his top priorities to set it on a new course. As we look forward to a new age of Starbucks, it is with hope that the brand embraces its community-centric roots.
Photo by Josh Sorenson on Pexels.