Did Mobile Ordering Fix the Waiting Line Problem for Starbucks?

As college students, we are keenly aware of the congestions that happen at Starbucks. Starbucks is known for giving their customers an “experience” with their coffee. The dark lights, the mellow music, and the general artsy vibe they express through their interior decor and setup are why they are sought after. Starbucks is still expanding, so stores are continually showing up on every corner. Yet, the increased popularity comes with business stresses that could not have been expected. Starbucks is known for their infamous long waiting lines. They have incorporated drive-thrus and online ordering to decrease the wait time, but these solutions are not making the changes that management has expected.

The new mobile ordering app has shifted the problem from the cashier lines to the coffee pick up area. More and more people are using the ordering app to avoid waiting in line, only to be put in another congested area. The current stores cannot keep up with the increased volume demands. This makes sense to me, as Starbucks did nothing to actually improve their production efficiency, they simply gave people another avenue for placing their already complex and numerous orders. This congestion has negatively impacted the company shares, and last year their shares actually fell four percent. Overall, having too much demand is good for business, but Starbucks is taking too long to adjust to the changes that need to be made. You may love Starbucks, and genuinely prefer their coffee to other places, but if you know that the whole transaction, from start to finish will take over fifteen minutes, you may be forced to take your business to one of their competitors like Dunkin Donuts. Former CEO Howard Schultz stated, “We are now laser-focused on fixing this problem, but the nature of it, too much demand, is an operational challenge we have solved before, and I can assure you we will solve again.” Some changes Starbucks are planning to make are having baristas specifically for online orders and using text message notifications to let consumers know exactly when a mobile order is ready to be picked up.

Starbucks stores are not particularly spacey. They mostly have only two cash registers and one line.Once you pay for your order you wait at the pickup area for your coffee. This is not a line, per se, but more of another phase in their model. Starbucks operates on a single channel, multiple phases system. The priority rule for the cashier line is first come first serve, and I believe the pickup line is a combination of first come first serve and customer with the shortest expected processing time. For example, once you place your order your drink is next in like to be made, but drinks such as plain coffees and teas generally get their order filled first because simple drinks require a one-step process. It is ultimately up to the managers to make these type of risk decisions, but a few things they need to take into consideration when dealing with waiting lines are line arrangement, service time, and the number of channels. Personally, I think Starbucks should look into building larger locations so that more workers can be making drinks and more registers can be simultaneously operated.

16 thoughts on “Did Mobile Ordering Fix the Waiting Line Problem for Starbucks?

  • February 20, 2018 at 5:06 pm
    Permalink

    I think that the ordering by phone is a good idea but it can make the customers that are in the line upset. If you are making a line, where the order is first to come first to order, you will not like the idea of someone just coming into the store an picke up their drink without making the line. The rule of ordering in Starbucks has always been first to come first to order, so customers might not be happy with this change.
    I also believe that yes, they should look into new larger locations and also more employees. Righ now their problem is that the average customers to arrive is higher than the customers been served in that same amount of time. So, they could increase the employees and resources to be able to satisfy all of their demand.
    Another idea is having more channels in the back. What I mean is, usually there are one or two employees taking orders and 3 or 4 making the drinks. So, in the second phase there are like double of channels that in the first. Making an order does not takes too much time, the problem is making the drink, so by increasing the number of channels, employees, in the second phase, the service would be delivered faster.

  • February 20, 2018 at 8:06 pm
    Permalink

    Another interesting solution to this problem could be to study the peak customer hour periods and have more employees cover shifts during those specific times. Starbucks has always been known for its warm, cozy environment, which is why I do not agree with the idea of increasing its size to accommodate waiting customers. In my opinion, it would be a good idea to increase the size of the area where baristas work. Also, increasing the size of its stores is a proposition that requires a huge investment and might be a good fit for the long-term. In the short-term, increasing the number of employees during peak times might be more cost-effective and a better fit for Starbucks.

  • February 20, 2018 at 9:08 pm
    Permalink

    I think Starbucks’ mobile ordering technology was a necessary option for them to add in a competitive environment that caters to on-the-go customers, but as you mention, it still has wrinkles that need to be smoothed out. I like your proposition to expand the size of some stores, but also see the issue Maryam brings up. Despite its size, Starbucks maintains a prototypical coffeeshop vibe, something a lot of their customers appreciate. An alternative could be to only expand their largest stores. For example, a Starbucks near a large subway station in New York City would get expanded, but one that experiences less traffic could remain the same. This way, Starbucks could begin to solve its wait time issue without abandoning a key differentiating factor. Another option could be addressing the difference between simple orders and complex orders. Perhaps this could lead to the addition of another pickup line, adding a channel to the process. In this scenario, there could be a “basic drink” pickup and a “custom drink” pickup. Ideally, this would also combat some of their congestion issues.

    • February 22, 2018 at 8:35 am
      Permalink

      Both Maryam and Nicholas make great points about suggesting solutions that could potentially alleviate some of the bottlenecking and waiting line issues. I really like that Maryam considered retaining key aspects of the Starbucks environment that are critical to keeping the cozy shop layouts to what customers know and love. Nicholas also brought up an interesting suggestion about creating different order lines, one for simple, less time-consuming drinks and another for more custom, complex drinks. This suggests that Starbucks baristas are able to split priorities differently in order to still fulfill the priority rule, but through separation of drink processing time. I perhaps believe that the Starbucks could employ useful techniques to make drinks more strategically and efficiently. The company probably has prediction of arrival rates and algorithms that estimate the peak and total number of customers. I know that loyalty cards and the mobile app garners a lot of data; the CEO should consider working more closely with Joe Cugna, the director of data and business intelligence, in using the invaluable data collected from this app. However, it could look at this data again and perhaps bring in one or two more baristas at those predicted peak arrival times and provide increased enjoyment to more customers.

      https://datafloq.com/read/world-largest-coffee-shop-starbucks-grinds-lot-dat/440

  • February 21, 2018 at 3:20 pm
    Permalink

    I use the Starbucks app to order my coffee/food almost religiously, and have never had a problem! So in my experience it works pretty well in helping me skip the line. In a few cases I’ve had to wait an extra minute or two if I arrived before my order was ready, but I rarely get caught up in another line for mobile pick-up. A lot of other stores, both retail and food, have adopted online ordering and pick-up services. The downside to these are that orders might not be executed accurately, and the companies may have to hire extra help just for these services since the time is such a sensitive factor. My friend worked in a Target and was in charge of going out into the store when a mobile order was placed and retrieving the item for pick-up. Walmart also just added a grocery order and pick-up, so you can find everything you need online and it will be waiting for you at the store. Over the summer I even saw students running outside to meet a truck delivering their online grocery orders. I think ultimately these services add rather than reduce costs for a business, since they need to invest in other resources and employees to meet customer demand. Besides, it takes away normal human interaction!

    http://www.businessinsider.com/walmart-grocery-order-online2018

    http://www.philly.com/philly/business/retail/grocery-chains-delivery-amazon-peapod-giant-acme-whole-foods-20180209.html

  • February 21, 2018 at 6:16 pm
    Permalink

    It is very interesting to hear about the congestion problem that Starbucks experiences. I personally have experienced this same issue at similar places that implement an online ordering app, like Chipotle. The App helps greatly with not standing in line to place the order. However, there are two other problems that are then created: 1) the customer has to wait to receive the order, or 2) the food or drink is made prior to the estimated arrival time and is not fresh. With regards to Chipotle, they recently have hired a CEO that previously worked at Taco Bell. This CEO had experience with GrubHub as well and is very interested in integrating technology in the ordering process (https://www.cnbc.com/2018/02/14/former-taco-bell-ceo-brian-niccol-is-the-new-ceo-of-chipotle.html). However, as we can see from this Starbucks example, there is only so much that technology can do for the wait time. I am curious to see if both Starbucks and Chipotle either improve their operations, or expand to more locations in order to keep up with demand. If they do not add either of these suggestions than I am excited to see what solution the company comes up with.

  • February 21, 2018 at 6:30 pm
    Permalink

    I think when you consider the increase in demand Starbucks has experienced in the last decade or so, there is no doubt that Starbucks needed to employ some form of online system. While it is true that there will still be congestion while customers are waiting for their coffee to be ready, other parts of the waiting line will be trimmed. When more customers choose to order online, it allows the customers who enter the brick-and-mortar store to order and pay for their coffee to experience less wait time. This reduces much of the strain on the order and payment part of the supply chain. The problem with Starbucks’ approach to utilizing this system is the timing. Starbucks knew it had an issue with meeting the demand for their products, which resulted in long wait times. The speed of product delivery is an essential piece for companies within Starbucks’ industry. Before initiating the online system, Starbucks should have analyzed and optimized their processes so that they were more likely to be able to meet their high levels of demand. I don’t think this is as detrimental issue as it is being construed, it is unlikely that the congestion had anything to do with the four percent share drop. This issue is simply a small decision-making error as online-ordering should have been phase two of a process improvement.

  • February 21, 2018 at 6:53 pm
    Permalink

    As you mentioned, one of Starbucks’ main advantages over competitors is its atmosphere. Offering more mobile orders and drive through windows means that customers no longer get that same experience. In order to combat this, Starbucks needs to ensure that the service customers get when ordering these ways is just as good, if not better, than service in the actual store because there is no fun experience or human contact to make up for long wait times or messed up orders. So far, I’ve never had a problem with mobile orders at Starbucks, but as the demand for mobile orders increases I agree that Starbucks will have a big job to manage the new demand. I think that since Starbucks has a lot of customer loyalty and has been very good at staying ahead of the competition so far, it will be able to keep on doing so by coming up with solutions to the problems you’ve mentioned.

    • February 21, 2018 at 9:03 pm
      Permalink

      I completely agree with Jordan’s point. I think altering the atmosphere of Starbucks’ stores will severely affect how consumers’ view their company. That being said, there are two types of customers Starbucks has: those who go to Starbucks to spend a substantial amount of time there, get a coffee, and do work or read, and then those in a hurry simply looking to get their coffee and leave. This is proving to be somewhat of a predicament, as any change to appeal to one consumer affects the other. As Maryam mentioned, I think the short-term solution is to possibly just hire more employees. Having some baristas designated to make “simple” drinks, such as iced coffee or tea, for the customers in a hurry, and then others focusing on food and the more complex drinks, could help speed up the process. They may already do this to some extent, but by hiring more employees at locations/peak hours where long waiting times are an issue, this could be a short-term solution without being at the expense of losing one of their biggest assets, which is their atmosphere.

  • February 21, 2018 at 8:15 pm
    Permalink

    I really loved using Starbucks as an example for waiting in lines. I am also a huge fan and big user of the online ordering ap. While this may be the case in a lot of places, my experiences with the online ordering has been nothing but positive. I think the longest I have ever had to wait for my order was maybe 5 minutes. One time I even used the app while standing in a long line in order to expedite the problem. I think that one of the major ways that Starbucks could improve on this problem is managing their capacity better. A lot of space tends to be taken up by various displays or products for sale. It is difficult to find breathing room sometimes when you and everyone else in there is waiting for their order. Additionally, I would argue that with their ordering app, Starbucks shifted from single channel, single phase system to a mixed arrangement. If you are ordering on the app, you cut out the channel of the cash register and only need to go to the order pickup section of the store. Starbucks’ congestion is a complicated issue but I have complete faith that it will be solved soon.

  • February 21, 2018 at 8:56 pm
    Permalink

    Your article does a good job in highlighting everything Starbucks has tried to do in order to fix the wait problem, but it doesn’t really touch on certain aspects that could be causing them. Fixing a problem doesn’t always mean creating a new process to try and diminish it, sometimes the answer is merely correcting certain management decisions. In 2016 Starbucks cut it’s barista’s hours which is one of the causes of the long lines. Fewer hours means fewer people on the schedule resulting in longer wait times. Another issue is the introduction of more food offerings. Starbuck’s core product is coffee which they are clearly doing great selling. The unnecessary introduction of more goods has brought in even more customers, which sounds like a good thing as you said, but they should be focused on serving their target customers. They need to concentrate on their primary product which I believe should ultimately decrease excessive customers, decrease wait times, and increase profits.

  • February 21, 2018 at 10:29 pm
    Permalink

    Starbucks is a fan favorite for college students, middle school students, middle-aged working men and women; just about everyone. Coffee is an enjoyment for any type of consumer regardless of age, race, or socioeconomic status. This is why I believe Starbucks is so successful. It introduces high quality coffee (quality strategy) while also providing an inviting and welcoming environment. At least that is what it used to provide. As Starbucks works to adjust to the long waiting lines, I agree that they should begin to consider the layout of the shop floor. Rearrangement along with the new text messaging system would allow Starbucks to focus on its time strategy as well and hopefully see rates of total time in system reduce. I see no issue with the capacity of Starbucks. They manage scale well; are constantly expanding; and the management team knows their utilization. Overall, Starbucks is a very successful company. However, the emergence of trendy coffee shops is starting to become a future threat for Starbucks. The independent shops offer the same experience and quality at Starbucks, but the lines are much shorter because demand is not quite as high yet. After much thought about what Starbucks could do to maintain its spot at the top, I would have to agree with Isabelle Rusher. Izzie’s comment about “unnecessary…goods” is true. Starbucks knows what its biggest star is, and that the have loyal customers who would return despite the elimination of certain goods. At this point in time, it is important to make the customers happy, and reducing waiting times is a major factor hindering this.

    Article: http://www.businessinsider.com/starbucks-competition-independent-coffee-shops-2017-3

  • February 21, 2018 at 10:35 pm
    Permalink

    This type of interface has been proven effective (through personal experience) as long as the majority of the congestion is at the ordering line and not in the preparation process. At the Starbucks in downtown Newport, RI, I took advantage of the app numerous times if I wanted a coffee in a timely manner while on my way to work. While each time I was delighted to walk around a long line stretching out the door, I was still forced to wait for quite awhile for my coffee to come out despite ordering roughly 5-10 minutes in advance. The interface for Starbucks specifically is contrary to the competitive priorities that the company has focused on. As Brianna mentioned, Starbucks highlights the “experience”, which includes primarily the environment that customers are supposed to enjoy their coffee in. A mobile ordering interface deviates from this idea quite a bit, highlighting convenience and promptness over experience.

    A competitor, Dunkin Donuts, also uses a similar interface. What is different is that Dunkin Donuts focuses on convenience and quickness in terms of their competitive priorities. In order to further highlight their priorities, they have started to introduce multiple drive-thru lanes at some locations where customers who ordered through the app receive their order at a an expedited rate. Furthermore, in contrast to Starbucks, Dunkin Donuts has begun scaling back their food options as Starbucks continues to expand theirs. This ensures faster service for the customers of their largest product segment.

    https://www.inc.com/bill-murphy-jr/dunkin-donuts-has-a-stunningly-simple-new-trick-so-youll-get-your-coffee-faster.html

    https://www.cnbc.com/2018/02/08/dunkin-donuts-unveils-plan-to-boost-afternoon-sales.html

  • February 22, 2018 at 12:14 am
    Permalink

    I think this is a great topic to compare what we are learning in class about waiting lines to a real world situation. I have actually thought a lot about what you said about Starbucks in my own life with online ordering at Chipotle. Growing up my friends and I went to Chipotle at least three times a week, and one day during my senior year of high school when I was about to order my meals, one of my classmates walked in front of my to pay for his already made food. I thought it was a crime, and that I had just been cut, while he was living in luxury, able to skip the 15 person line that had built up behind me, and begin eating before all of us. The difference between the situation with Starbucks that Brianna talks about and the situation with Chipotle is where online purchasing caused more of a hold up in the waiting line. In Starbucks, Brianna talks about how the hold up in the line transferred from ordering station to the cashier. With Chipotle, the line at the ordering station was slowed down even more than it usually was, while the line at the cashier remained efficient. The reason these situations were different was due to the product that the companies make. Starbucks makes coffee and other products that are made following your order. Chipotle makes your food as you tell them what to put in your burrito or bowl so when there is an online order, they have to stop the line of people ordering at the restaurant to make the online order. This would be the Same case as if a restaurant like subway had online ordering, as the line of people in the store would have to wait while to sandwich makers service the online order. Having a worker specifically for online orders would not help the situation at chipotle, while it may help the Starbucks situation.

  • February 22, 2018 at 7:52 am
    Permalink

    Sometimes the demand for a product, like a cup of coffee, cannot just be matched by fixing the structure and channels of the waiting lines. Airports have tried for years to improve the waiting line experience, and while they have succeeded in areas like TSA Pre-Check, other issues in getting through security and customs are still large issues. What would be a good idea for Starbucks is to look internally within their own supply chain to see if they can get any faster. For example, if a barista cannot make coffee fast enough to match the incredible demand in certain cities, perhaps creating a self-service kiosk that can make coffee fast is a solid alternative. This would create greater efficiency in their supply chain, but would have some major costs and could limit quality in the product.

    If they wish to focus stricting on fixing the channels of the waiting lines, though, one option they could look to is statistical and probability analysis during certain hours. If there is a strong probability Starbucks will get 100 customers within the hours of 8AM and 9AM, they should plan accordingly and hire more employees in that time frame to match the demand for coffee. Having a better understanding of what demand is for certain hours can be critical for Starbucks managers to create better schedules for their employees. Furthermore, statistical and probability analysis should be very doable because of the large sample size of customers.

  • February 22, 2018 at 8:22 am
    Permalink

    I have definitely experienced this issue at Starbucks. In general, when I look to get coffee or food, my preference matrix includes five order qualifiers: quality of food/drink, parking difficulty, waiting line time, distance, and price. The order winner may vary day to day on the particular situation that I am in. Regardless, I always get annoyed when I have to wait in line; this seems to always be the case when I go to a Starbucks store. Initially, I thought Starbucks management had solved their enormous capacity problems and managed their waiting lines by creating drive through stores and also allowing mobile ordering. My experience at Starbucks has not changed much. For example, when I order on the mobile app, I find that I have to wait in a long pick-up line. In addition, there always seems to be a long drive through line. As Brianna suggests, I also believe that Starbucks’ management team should focus more on advancing their supply chain process; they should start to develop and pursue new strategies that will allow for more cups of coffee to be made at a specific time. Also, they should begin to figure out how to distribute the most orders at a specific moment.

Comments are closed.

css.php