Starbucks Expands Curbside Order-Ahead Options

Need to Know

• The coffee chain is planning to increase the number of its U.S. stores offering curbside pickup to 2,000, from 800 currently.
• More curbside pickup will help alleviate long drive-thru lines created by complicated drink orders and reduce wait line rejection on the part of customers.
• In order to initiate curbside pickup, customers must place an order through the Starbucks app and select curbside pickup as an option.
• Starbucks has been prioritizing its digital infrastructure amid the pandemic, as many customers remain working from home and continue to prefer contactless buying options.

Analysis

U.S. coffee chain Starbucks has announced plans to ramp up its curbside pickup program, as the ongoing COVID-19 pandemic has led the company to consider more efficient ways to serve its customers in a digital-first, contactless manner.

Starbucks currently offers curbside pickup at 800 of its US locations and announced last week that it plans to expand the offering to 2,000 US locations over the next couple of months. As more customers are turning to drive-thru pickup, the chain has encountered long lines due to complicated drink orders; in turn, this poses a risk of wait-line rejection on the part of consumers.

Speaking at the JPMorgan Gaming, Lodging, Restaurant and Leisure conference, Starbucks CFO Pat Grismer explained that, “given the complexity of the builds”—which is to say, the complexity of each customized drink order—”the wait times in the drive-thru line can be long.”

If customers arrive at a Starbucks location and are confronted by a long line, curbside pickup allows them to place an order via the mobile app and pull into a parking spot, thereby both taking pressure off of the drive-thru and retaining customers that might have otherwise abandoned their order due to impatience.

Starbucks is planning to shutter up to 400 of its stores over the next 18 months, and about 3% of its restaurants are currently closed. In an effort to recoup losses that it accrued during COVID-19 lockdown measures, the company is throwing its weight behind off-premise channels, like its app, which the company hopes will drive customers towards the ease of curbside pickup. Starbucks is also securing additional parking spots at its suburban locations, which are driving the majority of the company’s business now that consumers are working from home rather than commuting to offices in large metropolitan centers.

Starbucks has been leaning on its digital infrastructure throughout the pandemic, announcing in April—shortly after some lockdown measures were lifted—that it would be leveraging the capacities of its mobile app to enable more contactless pickup and pre-ordering, in order to reopen 90% of the stores that had shuttered during the lockdown. The company has also improved that app in the meantime, adding more payment options and expanding its Rewards program. Starbucks first expanded its pickup-only capacities in June of this year.

Starbucks has also expanded its product traceability capacities, launching a blockchain-enabled traceability tool in August in an effort to enable customers to “get closer” to the farmers that grow Starbucks’ products and to thereby cultivate greater customer loyalty.