Starbucks: Will Slowing Down Speed Sales Growth?October 19th, 2010 | Posted by in Uncategorized
Starbucks’ evolution from Seattle coffee house to corporate giant has caused hand-wringing in recent years as it has tried to retain its neighborhood coffee-shop feel while simultaneously covering the globe. When Howard Schultz resumed his role as CEO in January 2008, he initiated changes that were meant to bring the company back to its roots—grinding coffee beans in stores, menu revamps, and even unbranded “local” stores.
Starbucks latest change was announced last week when baristas were asked to focus on making no more than two drinks at a time. Such edicts, while admirable in theory, may ignore the reality of a modern-day Starbucks. Baristas are already complaining that the new requirements will limit their ability to deal with long lines. Debates between quality and quantity are not new nor are they limited to Starbucks. Different chains have landed on different sides of the debate – who is right? What do customers actually prefer?
Unfortunately, there is no single answer in this debate – different concepts that make different promises to their customers will find different answers. Testing these types of changes is vital, not only to measure the impact on metrics in focus (average customer wait, sales, customer satisfaction), but also to identify any unintended consequences of changes to processes, including impacts on inventory and staffing levels during various day parts.
As noted in the Wall Street Journal, a Starbucks spokeswoman didn’t have full details on any testing that had gone into understanding the impact of the new policy, though testing would clearly provide insight on such strategies.
Ultimately, Starbucks is caught trying to satisfy the contradictory demands of customers—quality, personalized beverages without a wait. It’s also being squeezed by cheaper McDonalds and local, premium coffee houses. As Starbucks develops new initiatives in the increasingly crowded coffee market, it would be wise to carefully test them to ensure a successful balance between its public image and its business model.
Learn more about how APT’s restaurant clients (ranging from Subway to Olive Garden) use a Test & LearnTM process to improve profits on new operational, pricing, promotional, and marketing ideas.
You can follow any responses to this entry through the RSS 2.0 Both comments and pings are currently closed.