As companies tend to offer value-based products and buzzing drinks to attract price-sensitive consumers, Starbucks is doubled by plans to restore basics in its cafes.
The coffee giant aims to stand out in a consumer environment as it tries to boost sales that are boring.
Last week, the company began training baristas for a new “Green Apron Service” program, part of CEO Brian Niccol’s “Back to Starbucks” program, which highlights more friendly cafes and cup drawings like Sharpie. Green apron service is based on this Starbucks Visiting habits.
The program is supported by changes to ensure proper staffing and better technology to keep service hours fast. It stems from the growth of digital orders, which now account for more than 30% of sales and feedback from barista.
“The strategy is to reconnect our partners with customers,” Chief Operating Officer Mike Grams told CNBC at a newly remodeled store in Seattle on Monday.
“You greet with a smile when you walk through that door. You are welcomed again when you are crossed, a perfect cup of coffee…you come across that connection.”
Investors will once again understand how Nikkor’s turnaround plan works when the company reports revenue after Tuesday’s close. Starbucks shares climbed about 2.7% this year, surpassing the 8.6% growth of the 500 Index, and as Wall Street debates, how long it will take for Nicole to improve the chain's performance. The stock has grown less than 3% since Niccol accepted the Ins Rope last September, with stocks up nearly 25% in the year.
Niccol is trying to start sales in the coffee chain. Last quarter, same-store sales fell for the fifth consecutive quarter.
The push for more enthusiastic cafés will play a major role in this effort.
Grams was appointed Chief Operating Officer in June to oversee the company's global supply chain and its global coffee house development projects for North American cafes. Taco Bell, who was formerly the chain's president and global chief operating officer, came to Starbucks in February. Nicole was once the CEO of tacos.
Grams said the Green Apron service push is the company’s biggest investment in hotels and its store employees. The company does not provide dollar figures for investments.
Part of the program involves smart queue technology, which uses algorithms to enhance staffing and scheduling to help barista deliver more consistent and higher quality services, Grams said. The company wants customers to order their services in stores or online in a consistent manner.
“You'll show it in a different way,” he said. “You might see a digital host in the front and he's browsing this experience…it could be an extra person. The idea is actually making sure we're at the right time all day at the right time in the right place.”
The success of the Green Apron Service Program will be directly related to measurable metrics such as customer experience scores, traffic growth and storage productivity.
Cafes face new benchmarks for success, including providing customized beverages in four minutes or less. Early results from its 1,500 green apron service pilot show improvements in transactions, sales and customer service hours, with 80% of catering orders meeting the chain’s four-minute target.
Continuing to build on this trend may be key for Starbucks. The reality is that customers may prefer speed over warmth and have little tolerance for long waits.
Krass said Starbucks has multiple ways to stay competitive, including a strong digital business, with a “uplifted” drive in more than 7,000 stores and cafes to make them more comfortable.
“It comes in a way that we touch all three channels,” he said of the hotel initiative. “We have 20,000 units in North America, which gives us a huge competitive advantage.”