Technology

Starbucks and its Technology

Technology is improving at exponential rates, and businesses are taking advantage of the new ways to contact and stay in touch with customers. Especially after many corporations realized they needed to swiftly update their technology following the pandemic shutdowns (McInerney, 2022, p. 4). According to the article Digital Marketing Skills, Industry & Technology for 2022 and Beyond written for the Digital Marketing Institute, "90% of U.S adults say that the internet has been essential or important during the coronavirus pandemic" (McInerney, 2022, p. 4). Starbucks had already implemented its mobile ordering app, and it was a well-established loyalty program by 2020.

At this point in 2022, whether to have mobile ordering technology or not, is not a viable question. Instead, what steps we should be implementing to have an excellent mobile ordering interface is the crucial question. The article 12 Mobile Food Ordering Statistics Showing Rise in Customer Demand reveals that one-third of e-commerce sales take place on people's mobile devices (Fitch, 2022, p. 2). But, to have a mobile app and utilize a mobile app are two different things. A mobile app is essential because it allows companies a direct line to their customers (Nathaly, 2020, p. 2). But, if a company does not use this technology correctly, consumers will likely delete the app without a second thought. To utilize a mobile app, a company has to have a set strategy set up expressly for it and use hyper-personalized marketing to show the right promotion, at the right time, to the right person, in the right location, for the right price, with the right message (Nathaly, 2020, p. 2).

Starbucks has done a great job of utilizing its mobile app. But, Morgan, the Starbucks manager, stated that the mobile app is not without fault. They feel that the mobile ordering app has three significant issues (Smith & Doe, 2022).

Cannot provide an accurate time for when mobile orders will be ready.
Has allowed customers to see all of Starbucks' ingredients and therefore apply up to twelve modifiers to a drink causing drinks to become more complicated.
Has directly affected Starbucks's "Third Place" model.

Morgan recalled once that a customer put in an order for ten travelers, travelers are an entire urn of coffee usually used for catering, and the app told her they would be ready in five minutes. So, when the customer arrived to collect, Morgan had to explain to a slightly frustrated customer that their order was nowhere near prepared (Smith & Doe, 2022).

They confirmed that since mobile ordering was implemented and more widely used, the number of modifications has increased. Still, the expected time for these more intricate beverages has decreased, putting a strain on all baristas on the floor (Smith & Doe, 2022). According to Morgan, in 2018, the number of modifications ranged from 1-2, anymore and it would have seemed rude and pretentious. But in 2022, 4-5 modifications are the norm, and Morgan directly equates that to the mobile ordering technology Starbucks has put in place and the lack of customer restrictions (Smith & Doe, 2022).

Morgan is most frustrated with mobile ordering taking away from customer interactions and experiences (Smith & Doe, 2022). To them and many of their peers, the popularity of Starbucks' mobile ordering app has made Starbucks lose its way regarding the "Third Place" model they still tote around. The mobile ordering app has conditioned customers to grab and go for their coffee and not stay in the cafe. This transition is making Starbucks move to a more fast-food model of business.

Morgan shared their stores' statics, and upwards of 30% of their stores' orders are mobiles, whereas just above 10% of orders are taken in the cafe, which puts drive-thru orders taking the most significant fragment of the ordering at nearly 60% (Smith & Doe, 2022). Customers aren't even entering the cafes (Smith & Doe, 2022).

COVID-19 urged this way of ordering forward in a way that Starbucks was not prepared for. According to Jonathan Maze in, Starbucks faces downside of mobile ordering, "7% of Starbucks' U.S. consumers used mobile ordering and payment, up from 3% a year ago" (Maze, 2017, p. 1). For a well-established company, to increase 4% in the usage of technology that's been around since 2015 in one year is significant and could lead to processing issues.

Morgan recommends that corporate needs to get in stores and experience firsthand the issues the mobile ordering app is having and promote internally from within Starbucks stores (Smith & Doe, 2022). Therefore, the upper-level management would have real store experience and know the baristas' struggles, and they need to fix the AI of the mobile ordering app quicker (Smith & Doe 2022).

The mobile ordering app is not the only technology Starbucks has implemented in its stores. To assist in the company's inventory systems and help determine the ingredients needed for its various drinks in stores, they have taken to looking at big data analytics from Weather Company to understand better what their stores will need during certain seasons (Han & Feng, 2017, p. 7).

Even behind the bar, Starbucks has tried to help the baristas with the issues the mobile ordering technology has brought by having baristas use DPMs, Digital Production Manager. Walking into a store on a busy morning at peak, consumers might see a barista off the bar and out in the lobby mingling with customers and ensuring the bar operates efficiently. Morgan gave me some insight into that system. The DPM lets baristas push thru cafe orders over mobile orders (Smith & Doe, 2022). Also, if a customer orders a mobile but the barista hasn't pulled that sticker yet, the manager on DPM can push that name thru so that customers would have less of a wait. This system also helps to mitigate baristas pulling all the stickers before the mobile order customer in the care or drive-thru and risk losing those orders (Smith & Doe, 2022).

Starbucks is trying to soothe the issues the mobile order app has presented, but they need to accomplish this task sooner rather than later. Anuj Pal Kapoor and Madhu Vij's article, Journal of Retailing and Consumer Services, states that retaining customers and rewarding their loyalty is essential (Kapoor & Vij, 2018, p. 4). Mobile apps have become crucial ways companies vie for their consumers' attention, and Starbucks has been getting more negative attention recently.