Incoming Starbucks CEO Brian Niccol steps faces a pressing challenge: fixing the company’s mobile app issues.
The app, which accounts for one-third of Starbucks’ sales, has become a source of frustration for customers and baristas alike. Long wait times and overcrowded counters are common sights at many locations.
It was revealed this week Niccol could be paid as much as $113 million a year for his role, but with that pay check comes pressure to solve the ongoing issue
Operational Struggles and Declining Sales
Starbucks has experienced declining same-store sales, partly due to operational inefficiencies exacerbated by the app. Former CEO Howard Schultz identified the mobile app as the company’s “biggest Achilles heel.”
The app’s complexity, with customizable drinks requiring more time to prepare, has led to bottlenecks, especially during peak hours. This issue has been compounded by the company’s failure to adequately adapt its operations to the growing demand for mobile orders.
Lessons from Chipotle
Niccol brings experience from Chipotle, where he successfully managed the shift to digital sales. Under his leadership, Chipotle introduced measures like dedicated digital prep lines and “Chipotlanes” for online order pickup, which helped streamline operations. Starbucks could potentially benefit from similar innovations to reduce congestion and improve service efficiency.
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Steps Toward Improvement
Starbucks has already begun implementing changes, such as new equipment and app updates that show order progress. However, the rollout has been slow, and experts suggest that more drastic measures may be needed. Niccol’s challenge will be to accelerate these efforts and convince investors of the long-term benefits of his strategy.
The Road Ahead
With expectations high, Niccol’s ability to address the mobile app problem will be crucial to restoring Starbucks’ reputation and boosting sales.
Investors and employees alike will be watching closely to see how the new CEO navigates this pivotal moment for the coffee giant.
