Quick-serve food industry doubtlessly watching the chain’s scale problems closely.
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There are bad problems to have and there are good problems to have. The congestion in Starbucks’ stores, caused by the company’s relatively new mobile order-ahead technology, is one of those good problems.
The Seattle-based company reported disappointing sales growth on Thursday, with blame falling on the order-ahead capability it began rolling out in the United States in 2014 and which migrated into Canada in 2015.
The app allows customers to use their phones to select food and beverages and pay for them in advance. All the customer needs to do is show up at their chosen store and pick up their order.
Starbucks has previously reported that the functionality has served both the company and its customers well. Order-ahead has helped speed lineups and some of the busiest stores are doing 20 per cent of their business digitally.
But it’s looking like it’s working too well – lineups are now shifting from the cashiers to the pick-up kiosks. Customers are getting frustrated because they’re still spending the same amount of time waiting.
It’s not like this was unforeseeable. I asked Starbucks representatives about this very possible problem back in late 2015, when they were introducing order-ahead capability to Canada, and they didn’t have an answer.
They said it would be while before the company would have to deal with what in technological circles is known as “scalability.” It looks like that time has arrived.
Starbucks executives say they’re going to tweak their system to again try and limit customer wait times. One possible solution being tested is sending text messages to customers informing them that their order is ready.
“We are now laser-focused on fixing this problem, but the nature of it – too much demand – is an operational challenge we have solved before and I can assure you we will solve again,” chief executive Howard Schultz said on a conference call.
Text messages might help, but they won’t really get to the core of the problem – wait times. They’ll merely shift the waiting to somewhere else. If customers have to wait a long time for their order, it doesn’t really matter where they do it – they’re going to get impatient regardless.
Obviously, too much demand is a problem a lot of companies would like to have. It’s not clear how the chain is going to solve the issue, but the logistics of applying order-ahead functionality to such a big business is something that everyone in the quick-serve food business is doubtlessly watching closely.