Additional Coverage:
- Starbucks is staffing up its stores with baristas and ditching machines in the latest stage of its turnaround (businessinsider.com)
Starbucks is ditching automation for a more human touch, hoping a return to good old-fashioned customer service will boost its bottom line. CEO Brian Niccol announced the change in strategy following the release of the company’s second-quarter earnings, which fell short of Wall Street expectations. The company’s stock dipped nearly 7% after hours on Tuesday following the news.
The new plan involves increasing barista staffing and hours, a significant shift from the cost-cutting measures of recent years. Previously, Starbucks had focused on technological solutions, such as automated dispensers and high-speed blenders, in an attempt to reduce labor costs. However, Niccol admitted this strategy backfired, hindering customer service and ultimately, sales.
Now, the coffee giant is investing in what it calls the “Green Apron Service” model. This new approach prioritizes increased staffing levels, enabling baristas to focus on crafting beverages and connecting with customers.
A key component of the model is a new algorithm that optimizes the order in which drinks are prepared, streamlining workflow and reducing wait times. Currently being tested in 400 stores, the algorithm has already shown promising results in improving efficiency and creating a calmer work environment.
Starbucks plans to implement the Green Apron Service model in approximately one-third of its US locations by the end of fiscal year 2025. The company believes this investment in its workforce will not only improve customer satisfaction but also drive sales growth.
This move follows other recent changes under Niccol’s leadership, including encouraging baristas to personalize orders with handwritten messages and requiring in-store customers to make a purchase. The company is banking on these changes to revitalize the brand and reaffirm its position as a community hub.