Why Starbucks Is Killing It's Mobile-Only Pickup Stores For Better "Vibes" | Fast Five Shorts
Starbucks is shutting down 80-90 mobile-only pickup stores because they lack "warmth and human connection." Sponsored by the A&M Consumer and Retail Group, Mirakl, Ocampo Capital, Infios, and Quorso.
CEO Brian Niccol's surprising strategy shift prioritizes coffee house "vibes" over efficiency. Chris and Anne debate whether this move makes sense or signals deeper operational challenges at the coffee giant.
For the full episode head here: https://youtu.be/wKzV_5mqg64
Topics: Starbucks strategy, mobile pickup stores, customer experience, retail formats
#Starbucks #mobile #pickup #retail #customerexperience #coffeehouse
This podcast uses the following third-party services for analysis:
Podcorn - https://podcorn.com/privacy
Transcript
Starbucks plans to abandon all of its mobile order pickup only stores.
Speaker A:I can't wait to hear what you think about this one because I think this is, you know, part and parcel of a strategy that you would not have recommended back in a year ago when we, when Brian Nicholl first took over.
Speaker A:But according to the Wall Street Journal, Starbucks is moving away from operating stores that only accept mobile orders for pickup because they don't have the right vibes.
Speaker A:The company operates around 80 to 90 locations, some of which are in office buildings that don't offer seating and are designed to get customers out quickly.
Speaker A:Some locations could even be converted to locations with seats.
Speaker A:Quote, we found that the format was overly transactional and lacking the warmth and human connection that defines our brand.
Speaker A:Chief Executive Officer Brian Niccol told investors on a recent earnings call.
Speaker A:And do you agree or disagree with Starbucks decision to shut down its mobile only pickup stores?
Speaker B:Okay, I disagree completely personally with removing the pickup only stores, but I think clearly there are things behind the scenes going on that we don't know about.
Speaker B:I think the thing that rubs me the wrong way in the most here with this story is that you're using the statement bad vibes in any statement about a visit.
Speaker B:I don't like that too.
Speaker B:What in the hell are you thinking?
Speaker B:That seems crazy, but here's my question.
Speaker B:I want to know because I don't think we have a good picture of what Nichols actual vision is for these future coffee houses.
Speaker B:What is the right vibe that he's going for?
Speaker B:Because in the article that talks about we're going to have a coffee house that has 32 chairs and a drive through that already exists that's not anything new.
Speaker B:And the drive throughs are awful experiences.
Speaker B:They still take too long.
Speaker B:They're not getting the throughput.
Speaker B:So I think a better mobile experience is an absolute must for their future store experience.
Speaker B:Is it exactly how they were doing it now?
Speaker B:No, clearly not.
Speaker B:But I still think that a mobile pickup only experience has to be part of the future coffee house experience because not everyone needs coffee plus vibes.
Speaker B:Okay?
Speaker B:They want to just get their coffee as quickly as possible in under four minutes like Brian Nicol promised.
Speaker B:So my question is how do they continue to to refine operations so that they can give their customers the best of both worlds and as many options as possible.
Speaker B:But where do you land on removal of these pickup only stores?
Speaker B:I know you want your coffeehouse vibes, Chris.
Speaker A:Yeah, well, no, I don't know.
Speaker A:I mean, I love that you called out the vibe thing because we Went to the Penn Station store like five years ago and I thought that felt really vibey with Starbucks.
Speaker A:I actually loved it.
Speaker A:I thought the guy was great, that gave me my order.
Speaker A:It totally had a Starbucks vibe, it had a friendly vibe.
Speaker A:So, so I disagree with that being the motivation.
Speaker A:But I think I, I agree with this move but I with a big caveat in the short term because I think what he's doing here is you have to strip.
Speaker A:I think he's just stripping everything back to the base.
Speaker A:He's just like let's strip it all away and let's start over, let's start fresh.
Speaker A:That's what he's doing across the board.
Speaker A:Because for long run to Starbucks, for in the long run for Starbucks to survive and you and I have disagreed on this, it has to become more than just a place to get your coffee quickly and impersonately.
Speaker A:At least that's what Nickel thinks and I happen to agree with him.
Speaker A:However, with that said, I think you're hitting on the key point here is I do predict in the future that we're going to see this type of concept again, but either in a way that is more strategically located or in a new iteration of it, possibly alongside what he's calling his coffee house of the future.
Speaker A:Because Starbucks still needs to figure out the capacity issue for ordering and queuing.
Speaker A:So I think we're going to see this in some way, shape or form in the future.
Speaker A:But we won't know until we see what that prototype is.
Speaker A:And that's going to take a hell of a long time to re engineer the Starbucks store base to do that.
Speaker A:So I still think we'll potentially see these stores start to exist in some variety but with an enhanced marketing vibe, so to speak, when they do come back and roll out down the road.
Speaker A:That's my prediction.
Speaker B:Unbelievable.
Speaker B:I just like picture Brian Nicholl in his brand new office in Newport beach with his good Vibes only T shirt and trying to look out at the ocean and figure out what this new concept looks like.
Speaker B:It sounds very peaceful and relaxing.
Speaker B:I'm very envious.
