Pivoting to prioritize these other methods of reaching customers is key to what has made Starbucks so successful, because the chain is able to adapt to changing customer preferences, Yarbrough said, He pointed out that 75% of drinks sold by Starbucks are cold, which weren't even part of the chain's original menu. "They probably don't need all this room for people to sit around." Drive-thrus have outperformed locations without drive-thrus, he said, and having smaller seating areas to maintain could give Starbucks some savings. "The days of customers getting a coffee and hanging out are probably behind," he told Insider. Focusing on drive-thru and mobile ordering is in part an impact of the pandemic, but the shift in priority was happening before COVID-19 hit, Yarbrough said. These changes at Starbucks don't mean that most locations will be without seating and space for customers to gather, Edward Jones analyst Brian Yarbrough told Insider. This concept is in conflict with the chain's more recent emphasis on convenience, shifting the definition of "third place" into a " mindset" over a physical space. The chain presented itself as a "third place," where people can gather outside of homes and workplaces. Starbucks initially grew into a massive success by popularizing a premium coffee experience and introducing Americans to espressos drinks like lattes. The chain is considering locations that are drive-thru only, and has already created pick-up only stores and partnered with Amazon to launch a joint Amazon Go store where only mobile orders and payments are accepted. Starbucks closed some lower-performing mall locations in the past to focus more on drive-thrus. About half of locations have technology that allows customers to order through tablets operated by workers in drive-thru lines, and 65% of locations are planned to have them by the end of 2022, CEO Howard Schultz said in the call. About 90% of new locations are being built with drive-thrus, The Wall Street Journal reported in May. In other words, just 28% of customers enter Starbucks and place their orders with baristas, some of them staying and drinking their beverages on Starbucks property.Ĭustomers seem to love the convenience of alternative ordering methods, and Starbucks is making it even easier. Over two-thirds of orders now come from the mobile app, drive-thru, and delivery, the coffee giant said in an August earnings call. Starbucks is moving farther away from its roots in favor of convenience and efficiency. McDonald’s also wants to prevent competitors from snatching up good real estate, he said.Account icon An icon in the shape of a person's head and shoulders. In the U.S., he said, population shifts have left many parts of the country underserved. Kempczinski said he’s not concerned about cannibalizing sales from existing McDonald’s locations. The loyalty program is a smart move which gives out generous rewards along with weekly promotional bonus star offers and the redemption process is easy and. Once the status board updates to Ready, grab your items and enjoy. They have an assortment of options to choose from, be it drinks, food or merchandise. Choose your nearest Pick Up location and order. Sometimes they want to go to the restaurant with their family,” Kempczinski told The Associated Press in an interview. Starbucks is well known for its quality and exceptional service, be it in stores or via drive thru. “Not everybody wants delivery every single meal. But he said it’s important to open actual restaurants and not just delivery-only kitchens. Kempczinski said new restaurants will likely have dedicated pickup areas for delivery drivers to ease restaurant congestion. McDonald’s delivery made up $1 billion in global sales in 2017 that has grown to more than $16 billion. McDonald’s said the explosive growth of delivery demand makes it critical to get restaurant locations even closer to customers so food can arrive faster and hotter. McDonald’s is also testing new systems at the small-format CosMc’s restaurants, including drive-thru lanes that manage traffic based on the complexity of orders.
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