The Commoditization of the Starbucks Experience 2.0
In February 2007, then Starbucks Chairman Howard Schultz penned a scathing internal memo titled “The Commoditization of the Starbucks Experience,” expressing concerns that rapid expansion and certain operational decisions diluted the brand’s unique appeal. The following are some of his excerpts:
The Commoditization of the Starbucks Experience Memo
Over the past ten years, in order to achieve the growth, development, and scale necessary to go from less than 1,000 stores to 13,000 stores and beyond, we have had to make a series of decisions that, in retrospect, have lead to the watering down of the Starbucks experience, and, what some might call the commoditization of our brand.
… one of the results has been stores that no longer have the soul of the past and reflect a chain of stores vs. the warm feeling of a neighborhood store. Some people even call our stores sterile, cookie cutter, no longer reflecting the passion our partners feel about our coffee.
History has repeated itself
Since 2020, Starbucks has eliminated what made the brand great and unique. It became obsessed with implementing online and to-go ordering strategies, particularly through its mobile app, which has inadvertently led to several operational and customer experience challenges.
- Increased Wait Times and In-Store Congestion – The surge in mobile orders has often exceeded the capacity of in-store staff, leading to longer preparation times and delays for both mobile and walk-in customers and overwhelming staff. Extended wait times have resulted in dissatisfaction among patrons, with some expressing that the in-store experience has become chaotic and less enjoyable.
- Erosion of the “Third Place” Experience – The focus on rapid mobile order fulfillment has shifted the atmosphere from a relaxed “third place”—a space between home and work—to a bustling environment primarily centered on quick transactions. The emphasis on speed and efficiency has lessened opportunities for meaningful interactions between baristas and customers, a core aspect of Starbucks’ brand identity.
- Operational Inefficiencies and Inconsistencies – Baristas have reported challenges in managing the influx of mobile orders alongside in-person requests, leading to inconsistent service quality and order accuracy. The pressure to fulfill a high volume of orders quickly has, at times, compromised the quality of beverages and food items.
- Customer Dissatisfaction with Mobile Ordering Experience – Users have noted difficulties with the mobile app, including inaccurate wait time estimates and a lack of real-time updates, leading to frustration and unmet expectations. In-store customers have expressed feelings of being deprioritized in favor of mobile orders, affecting their overall satisfaction.
Related: Listen to Podcast 194 for more customer and employee experience current happenings.
New CEO’s Strategy to Fix the Starbucks Experience
New CEO Brian Niccol has shared his plans to right the Starbucks ship. He recognizes the challenges; Niccol has initiated several measures to improve the balance between mobile ordering and the traditional in-store experience:
The company is developing algorithms to better sequence orders, aiming to reduce congestion and improve efficiency. Plans are underway to streamline offerings by reducing approximately 30% of food and drink items, which is expected to ease operational complexities and speed up service. Efforts include creating distinct areas for mobile pickups and in-store orders to minimize overlap and enhance the customer experience.
Handwritten Notes
Niccol is doubling down on U.S. baristas writing short messages on customers’ to-go cups and bags. Starbucks last month asked baristas to resume the practice of writing on orders with markers, which was disrupted during the COVID-19 pandemic and hasn’t been routinely done since. “I think we should strive to do that for every customer, every transaction,” he said.
The following is my #1 favorite all-time customer service quote:
“We are at our best when creating enduring relationships and personal connections. When we are fully engaged, we connect with, laugh with, and uplift the lives of our customers—even if it is just for a few moments. It’s really about human connection.”
—Howard Schultz
Starbucks needs to make this their single focus again if they hope to make another comeback.
Related Post: The Rapid Decrease In Value Of Professional Expertise
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