“Starbucks’ New CEO Faces Challenge of Fixing Mobile Order Issues and Operational Struggles”

Starbucks is facing a significant challenge with its mobile ordering system, which has resulted in frustrated customers, overwhelmed baristas, and operational issues that have contributed to the chain’s sales decline. Mobile orders account for about one-third of Starbucks’ total sales, but they tend to be more complicated and time-consuming for baristas. This has led to longer wait times and a decline in the overall customer experience.

Former CEO Howard Schultz has identified the mobile app as the biggest Achilles heel for Starbucks. He believes that the company did not anticipate the technological refinements needed to handle the increasing volume of mobile orders. As a result, Starbucks has struggled to keep up with demand, leading to crowded stores and frustrated customers. Schultz argues that the company should have made significant adjustments to its operations to accommodate the shift in consumer behavior towards mobile ordering.

The problem has been exacerbated by the fact that Starbucks has positioned itself as a “third place” between work and home, where customers can linger and enjoy their beverages. However, with the rise of mobile ordering, customers are opting for convenience over the traditional Starbucks experience. This shift in consumer behavior caught the company off guard, and it failed to make the necessary adjustments to its operations.

The frustration with digital orders has not only affected customers but also baristas. The pressure to fulfill mobile orders quickly has led to burnout among baristas, which has contributed to employee unrest and unionization efforts. Starbucks Workers United, a union representing workers at 450 Starbucks stores in the US, has called on the company to turn off mobile ordering during promotions to alleviate some of the pressure on baristas.

In contrast, Chipotle has successfully navigated the challenges of digital ordering. The company has invested in technology and made operational adjustments to accommodate the shift towards online ordering. Chipotle installed a second prep line dedicated to digital orders and added drive-thru lanes for online order pickup. These measures have helped prevent bottlenecks and ensure a smooth digital ordering experience for customers.

To address the issues with mobile ordering, Starbucks has taken steps to improve service and baristas’ work experience. The company introduced a reinvention plan in 2022, which included new equipment and other measures to speed up service. The mobile app now shows customers the progress of their orders, and Starbucks has rolled out the “Siren Craft System” to make drinks faster and baristas’ jobs easier.

However, more drastic measures may be necessary to fully address the problem. The equipment rollout has been slow, and speeding up the timeline could significantly reduce service times and alleviate the strain on baristas. The incoming CEO, Brian Niccol, will need to prioritize fixing the mobile ordering system to turn around the struggling coffee giant. Niccol’s track record at Chipotle, where he successfully boosted digital sales and made operational adjustments, gives him credibility and the ability to gain investor support in implementing necessary changes.

In conclusion, Starbucks is facing operational challenges due to its mobile ordering system. The company needs to make significant adjustments to accommodate the increasing volume of mobile orders and improve the overall customer experience. By addressing these issues, Starbucks can regain its position as a “third place” for customers to enjoy their beverages and differentiate itself from competitors.