Starbucks focuses on digital efficiency

Even as consumers return to restaurants to eat indoors, Starbucks is shifting its focus from creating an inviting on-site space to improving the efficiency of digital order fulfillment.

The Seattle-based coffeehouse chain, the world’s largest restaurant company by revenue, with more than 34,000 locations worldwide, is stepping up its technology investments, according to a call with analysts Tuesday (May 3) discussing the company’s financial results for the second quarter of 2022.

“Going forward, we will … make significant investments to expand our digital capabilities and deepen our digital connection with customers and the emotional connection our customers have for the Starbucks brand,” said interim CEO Howard Schultz. . “The returns on our digital investments are consistently among the highest we generate.”

Starbucks is a leader in digital ordering. The PYMNTS Pre-Order Mobile App Provider Ranking, which ranks restaurant apps based on a proprietary combination of publicly available information and app usage data to which PYMNTS has access, places the chain of cafes in first place, where it is tied with Domino’s Pizza and Taco Bell.

Read more: Order-Ahead mobile app ranking sees triple tie for top spot

Where the brand once focused on creating engaging in-person environments, its so-called “third place” philosophy, the company now focuses on streamlining stores to meet digital orders.

Read also: Starbucks at 50: five innovations pioneered by the coffee chain

“Try to imagine thousands of much more productive and efficient Starbucks stores, reconfigured to align with current customer behavior and built around technology that will deliver increased speed of service, improve labor management work and reduce unit costs,” Schultz said.

Almost half of restaurant customers order online. PYMNTS’ April study, “ConnectedEconomy™ Monthly Report: 3 Ways Consumers Are Dealing With Inflation,” which is based on a survey of more than 2,800 American adults, found that 45.8% of consumers had ordered from restaurants online in March.

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Additionally, research from PYMNTS’ April study “The Digital Divide: The Key Factors That Drive Restaurant Choice,” created in collaboration with Paytronixwhich is based on a survey of more than 2,600 American adults, found that more than one in five consumers cite ordering features as most important in encouraging them to order at a specific restaurant.

See also: From outdoor seating to contactless payments, dining habits are changing

Instead of ditching the traditional third place in-store, the brand is arguing that its non-fungible token (NFT) strategy will deliver a similar experience digitally.

“NFTs now enable that aspiration and allow us to expand what Starbucks has always been at our core. We are creating the digital third place,” said Brady Brewer, executive vice president and chief marketing officer of Starbucks. Imagine acquiring a new digital collectible from Starbucks, where that product also served as an access pass to a global Starbucks community. One with engaging content experiences and coffee-centric collaboration. »

Over the past month, the company has made some major C-suite staffing changes. In early April, Schultz, who led the company through its initial ramp-up and joined at the end 2000s and early to mid-teens, again stepped in as interim CEO when former chief executive Kevin Johnson retired. Additionally, on Monday (May 2), former McDonald’s executive Deb Hall Lefevre took over from Hans Melotte as chief technology officer, according to an April report from Reuters.

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On: Shoppers who have store cards use them for 87% of all eligible purchases – but that doesn’t mean retailers should start buy now, pay later (BNPL) options at checkout. The Truth About BNPL and Store Cards, a collaboration between PYMNTS and PayPal, surveyed 2,161 consumers to find out why providing both BNPL and Store Cards is key to helping merchants maximize conversion.

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