There’s been a lot written about Starbucks’ drive-thrus. That’s not too surprising. After all, in less than a decade, Starbucks’ drive-thru rapidly morphed from a run-of-the-mill, vanilla customer experience, to a finely tuned, high-quality, brand-proprietary drive-thru that has generated millions upon millions for the chain. Clearly, Starbucks is doing many things right. You might even say it earned top-billing status at the drive-thru. Just recently, the brand announced drive-thru drove more than 50 percent of net sales in the second quarter, increasing north of 10 percent from pre-pandemic levels. And it’s going to anchor growth, especially in suburban markets, moving forward.
But none of the previous articles spelled out all of the things that came together to realize these results. So, in this article we reveal the “secrets” of Starbucks’ success. And in doing so, share with readers a roadmap to kick-start your brand’s drive-thru.
Winding Back the Clock
Let’s go back to 2009. Starbucks knew its drive-thru was below best-practice. It recognized the company had not looked at the drive-thru experience through the lens of the customer. In contrast, Starbucks’ in-store experience relies heavily on having multiple touch points along the customer’s path to purchase. There are promotional banners and window clings at the entry, suggestive-selling messaging prior to the order point. Plus, there’s a seductive pastry case beckoning trial. On top of this, the interior experience includes face-to-face interaction with the barista, music, décor, and aromas. However, at the drive-thru, these customer touch points were virtually nonexistent.
By 2010, Starbucks management started to take a hard look at the drive-thru. There were over 2,400 stores with drive-thru, which represented 40 percent of its portfolio. And those 40 percent were driving more than half of the brand’s cash contribution. So the prospect of growing this side of the business was enticing.
A cross-functional improvement team (including marketing, technology, operations, store design and development) was organized to start thinking about how to continue to grow the drive-thru business and make it even more profitable.
Opportunities and Obstacles
The team knew there were immediate improvement opportunities just waiting to be addressed. Any improvements that would get them closer to best practices seemed certain to result in beneficial business improvement. If Starbucks could then go beyond just catching up to best practices, the team felt confident this would be a significant growth strategy for the company.
But there was a very big obstacle in the way of making meaningful progress.
The C-suite was not yet very interested in the drive-thru. The feeling was that the drive-thru projected an image of fast food, and “that’s not Starbucks” (even though the brand is fast casual). So there was a cultural barrier that stood squarely in the way of investing in significant improvements.
This obstacle led to a critical opportunity in the team’s roadmap to success. In order to gain the support and financial backing needed from top management, the improvement team had to clearly and convincingly demonstrate that the drive-thru was important to the growth of the brand. The plan was to make initial improvements at some existing drive-thru locations to bring them up to best practice. The team would track and measure the results, and convey the outcomes and establish “proof of the need” by using “the language of top management,” which is the language of money.
What Starbucks Did to Achieve its Success at the Drive-Thru
Looking back over the timeline, we can identify those critical steps that contributed significantly to Starbucks’ ability to transform its drive-thru from ordinary to extraordinary. Collectively, these create a roadmap that other brands can follow as they revolutionize their drive-thrus. Interestingly, these same steps can be equally applied to improving a brand’s in-store sales and customer experience.
Thinking in Terms of “Customer Zones”
In 2010, Starbucks invited King-Casey to audit and evaluate a half dozen of its drive-thrus, accompanied by a small team of Starbucks managers. The audits pointed out that the drive-thru consists of many different customer zones. Each of the zones (approach, entry, pre-order, order, pay and pickup, and exit zone) represent unique customer touch points. Starbucks needed to understand customer needs and behaviors in each zone, and establish specific business goals and communications objectives for each. For the first time, the drive-thru was assessed “through the lens of the customer.” Was Starbucks providing the right message in each of these zones? Actually, it was not.
These audits turned out to be a catalyst moment. By the third site visit, the Starbucks team was driving the audit, pointing out how little consideration was being given to the customer at the drive-thru. Example—”there aren’t any signs to designate that the store even has a drive-thru; there are no messages prior to the order point to make the ordering process easier for the customer.”
The audit provided the first “aha” moment for Starbucks. Instead of thinking of the drive-thru as nothing more than an order and delivery point, the chain dissected the drive-thru into key customer zones and touch points. Deficits were identified in each zone. It started thinking through many different zone-specific improvement opportunities. For each zone it created a plan. New strategies were developed for the different customer zones. Messages were now cognizant of customer needs, attitudes and behaviors, and were tailored to meet specific, zone-appropriate business objectives. The drive-thru became an opportunity to influence strategic sales growth, improve the customer experience, while replicating some of the customer touch points found inside the store.
Optimizing Menu Communications
The most critical communication at the drive-thru is the menuboard itself. Starbucks systematically assessed the strengths and weaknesses of its current board, identifying improvement opportunities that would improve ease-of-navigation, speed throughput, increase food attachment, prioritize categories, and steer customers to high-priority products (see sidebar “More Aha Moments” for what Starbucks learned about adding images to the menuboard). Food and beverage categories and products were prioritized, based on their relative contribution to business objectives. Starbucks developed numerous menuboard layouts that were put into quantitative research to evaluate a dozen different tactics, including strategic placement of key items, the use of larger visuals, adding popular in-café items to the drive-thru, pairing food and beverage item to increase attach, establishing a 60/40 percent food to beverage space allocation, etc.
Attention was also given to the off-menuboard communications at the drive-thru. Strategic opportunities were identified for each of the customer zones, with priority given to the communications that would lead to growing sales, increasing profits, and enhancing the customer experience.
Getting Operations Involved
Any drive-thru is only as good as the operations supporting it. Too often, brands don’t invest the same amount of thought and planning for the drive-thru operations, as they do for in-store operations. Starbucks created an Operations Innovation Team to address opportunities for the optimization of drive-thru operations, such as:
- Adopt best practices from industry leaders
- Establish food and beverage equipment standards
- Optimize drive-thru technology (headsets; cup labelers; timers; order confirmation; payment technology; digital menus)
Testing and Validating Improvements and Innovations
The improvements and innovations demonstrated beneficial outcomes. They were growing the business while delighting customers. Such results allowed Starbucks to get a green light from the C-suite to really get the drive-thru effort going at a revolutionary rate. Starbucks established a group of Rapid Test Stores. Here a new methodology, strategy, design innovation, or new food and beverage products would be quickly and cost-effectively put into an actual store test. Management would get rapid customer feedback, rapid impact on operations, rapid validation of business potential, and a quick determination of “go or no-go.” If an idea was going to fail, it would fail fast and fail cheap.
Setting Stretch Goals and Continuous Improvement
The early results of these initial improvements opened the purse strings from executive management. A program (called Drive-Thru Evolved) was established with the following mission: Create a personal connection, deliver high quality hand-crafted beverages and anticipate customer needs by continuously improving store operations and leveraging technology that differentiates the Drive Thru experience.
A mission like this is only realized by tackling a myriad of improvement projects, each focusing on very specific problems and opportunities. Going back to the drive-thru’s different “customer zones,” each of the zones became improvement projects that would focus on that zone. What are we doing poorly in this zone? What are we doing well? How can we help the customer in this zone? How can technology help? In short, what are the improvements we can make in this zone to differentiate our drive-thru experience, and delight the customer?
The program would establish long- and short-term improvements and the stretch goals Starbucks established. Examples included:
- Be viewed as No. 1 in the Drive Thru Industry for Customer Experience
- Unlock full potential of Digital in the Drive Thru
- Leverage Customer Insights to exceed Customer Expectations
- Drive Incremental Profit of $500 million
Leveraging Technology
Innovation is a key mantra for Starbucks. It is continually identifying innovative uses for technology for the drive-thru and in-store.
A key element in making the drive-thru experience more experiential and less transactional was the addition of a 46-inch digital order confirmation screen. In addition to visually confirming the order, customers can interact live via a two-way video with the baristas taking the order. The innovative digital screen also promotes (in real time) available bakery items and suggestive-sell promotions to increase ticket and incidence of food attach to beverage orders. This “digital barista” offers a benefit that may not be obvious. It capitalizes on Starbuck’s greatest asset—its people—and their relationship to customers. It brings an element of the interior’s Third Place experience to the drive-thru.
Starbucks is now firmly established as a leader in mobile customer service. Its Mobile Rewards, Order & Pay technology is the stellar result of more than a decade of continuous improvement. Starbucks’ mobile app allows customers to order and pay using smartphones and then pick-up their order either inside stores, at curbside, or at the drive-thru. Today using the Mobile Rewards, Order & Pay app accounts for more than 25 percent of all orders placed in the U.S.
Investing Big to Make It Happen
The ROI resulting from the drive-thru improvements were quickly evident to the C-suite. Now, the drive-thru was top of mind, initiating the largest capital expenditure in Starbucks history—an investment to ensure an aggressive expansion of the number of Starbucks locations with the new drive-thrus. Continuous improvement is a way of life at Starbucks. The company’s goal is to continually improve the experience anticipating that drive-thru sales will continue to account for the majority of its business.
More “Aha” Moments
To Use, or Not-To-Use Visuals?
In the beginning, both the drive-thru and interior menuboards consisted of line-item listings (with few or no images). One giant improvement opportunity at the drive-thru was to increase the incidence of food attach by using visual images of the core and most popular food offerings. But this idea flew in the face of cultural resistance—imperiled by an internal concern that having images of food on the menuboard would cheapen the Starbucks image. But, thanks to Starbucks fast-track testing and positive customer feedback, Starbucks saw the strategy was working. Food sales significantly improved as did speed of throughput. Starbucks now prominently utilizes visuals on its drive-thru and interior menuboards, and throughout the entire customer journey.
How Much is Too Much?
Another “aha” moment occurred about a year into the testing. They discovered there is a saturation point for messaging within individual customer zones. Depending upon the zone and how customers use it, there are an ideal maximum number of messages the customer can digest. Going beyond that saturation point is a waste of money, and it can frustrate the customer and slow down throughput.” Zone-specific guidelines were established to help Starbucks manage “Total Messaging” within the drive-thru. This ultimately helped increase sales, speed customer throughput, and keep customers satisfied.
Tom Cook and Howland Blackiston are co- principals of King-Casey. Established in 1953, King-Casey is a restaurant and foodservice business improvement firm. King-Casey provides strategic menu optimization advice and a range of services to help clients manage overall food and beverage offerings affecting their positioning, reputation and business growth. For information, visit www.king-casey.com or contact Tom Cook at 203/571-1776 or tcook@king-casey.com
