Starbucks to Include Drive-Thru at 80% of New Locations

(As appeared in Convenience Store News 05/10/2018)

SEATTLE — Starbucks, the world’s largest coffee shop chain, will embrace the drive-thru lane at 80 percent of all its new U.S. cafes.

While that may contradict the sit-down coffee culture Starbucks helped pioneer, in-the-car service can be a big moneymaker when done right, according to a new Bloomberg report. 

“Convenience is really the key. People are looking less for the ‘let me go in there and sit down for a while’ and more of ‘let me go in there and get my coffee and go where I need to be,’” said Jason Moser, a Motley Fool analyst.

Starbucks has touted itself for cultivating a “third place,” a location between home and work for customers. However, this kind of culture has been on the decline as free internet connects have become more ubiquitous and co-working spaces have popped up. The company’s image as a hangout for the masses took another hit earlier last month with the arrest of two black men at a Philadelphia location.

Starbucks Chief Financial Officer Scott Maw made the case for window demand on a recent conference call, in which he told the tale of two locations in Fort Collins, Colo. One is located in a shopping center, while the other is a nearby drive-thru. He said sales were two-thirds higher at the café serving customers while in their cars.

“At stores with car service, 70 percent of sales come from the windows”, according to estimates by Tom Cook, principal at restaurant consultant King-Casey, a firm who has worked advising Starbucks. “Just a small percent of the chain’s customers actually linger inside”, he said.  “Most of the people that were going in there were going in and out,” Cook added. “Things have changed — everybody is more into this ease and convenience and speed.”

Edward Jones analyst Brian Yarbrough added: “Drive-thrus are a key to driving traffic — the issue is you have to be able to get people through. At some point, if they see there’s a huge line at the drive-thru, they’ll go down the street.”

Starbucks began adding drive-thru stores years ago, but is accelerating the push now as sales growth slows at its 14,000 U.S. locations. To combat the slowdown, the company has made efforts to revamp car-bound customers’ experience with the installation of 2,800 video screens across the country in 2015 in which customers could see baristas’ faces.

How King-Casey Helped Starbucks Launch Their Drive-Thru Revolution

“Starbucks started the optimization of their drive-thru by developing customer-focused, zone-specific merchandising strategies that have dramatically increased drive-thru sales and profits”, said Howland Blackiston, Co-principal at King-Casey.  “In addition, developing revolutionary improvements in the customer drive-thru experience has become a top strategic priority for Starbucks. It’s no longer sufficient to offer a drive-thru experience that’s merely equal to what other brands have”, continues Blackiston. “You must differentiate your brand by dazzling the customer with unexpected and superior convenience”.

Starbucks began making revolutionary improvements to their drive through when they embraced King-Casey’s “customer zone” approach to merchandising.  A process the firm calls COZI (an acronym for Customer Operating Zone Improvement).

“Understanding about COZI turned out to be a catalyst moment for Starbucks – that is, breaking down the drive-thru experience into (individual) customer zones”,  according to Alan Richardson, who at the time was Program Manager for Starbucks’ Innovation Team. 

“Before”, stated Richardson, “we weren’t thinking about the drive-thru as an entry zone, plus a wait zone, plus an order zone, plus a pick-up zone. It was just a drive-through. (COZI) helped us really think about each of those touch points. Are we making it easy to get into the lane? How can we do better in each one of these zones?  What are we leaving on the table in the wait zone? What could we do to maximize our pay and pick-up zone?  So now we think about each zone. What are the customer’s needs? What are our business objectives? Who can help us achieve that?   That was a breakthrough moment for us.”

About King-Casey

For more than half a century, we have been helping companies build competitive brands by dramatically improving the customer experience. Our highly creative solutions are firmly grounded in insights derived from hard data about consumer behavior. Our solutions are designed to delight your customers and help you achieve your business objectives. We provide a complete range of services including assessment, research, branding, visual merchandising, retail prototype design, and rollout. We will help you develop creative, innovative solutions that result in increased customer loyalty, higher sales and greater return on investment. We can make a positive impact on your business while exciting your customers with fresh, innovative and competitive design solutions. Be sure to visit our website: www.king-casey.com.

For more information please contact:

King-Casey (USA), Howland Blackiston, Principal, T: +1 203 571 1776