But returning to the drive-thru handheld POS initiative, Grismer said Starbucks is currently piloting and refining the model “so that we can rapidly deploy this.” The company first unveiled the change in July—a “bust the line” program that mirrors Chick-fil-A and In-N-Out, where order takers roam the line to get orders into the queue quicker and boost throughput and satisfaction.
“Absolutely we expect this to be a game changer for us in drive thru,” Grismer said.
When Starbucks first crashed the java scene, it was simply not designed for the drive thru. It’s a highly customized, made-to-order offering that backs up quickly with bulk orders.
It originally added drive thru to tap into a convenience movement, figuring (correctly) guests would trade long waits for the luxury of staying in their car. However, the equation isn’t so plain anymore. If for no other reason, there’s just a lot more people relying on the drive thru during COVID times. Bulking and line rejection are far more worrisome to Starbucks today than they were before.
Grismer said demand for drive thrus spiked significantly in suburbs thanks to people working from home. They’re taking a break in the mid-morning, and maybe in the afternoon again. They’ve brought the family along.
In turn, order sizes are up and so is ticket growth. Just in Q3, average ticket soared 27 percent in the U.S. as traffic fell 53 percent overall.
“We do expect that will moderate over time, but that does put pressure on the drive-thru experience,” Grismer said. “And so, we see handheld POS as an opportunity to collect orders sooner in the lines, so that we can start the production of those handcrafted beverages and be prepared to fulfill those orders more quickly than we are today.”
The stakes are clear: Better drive-thru times equal fewer drive-aways. “So we’re better able to capture the demand that is out there,” Grismer added. “The last thing we want to have happen is someone drive up to Starbucks, see a long line, and continue on their way.”
Before COVID-19, customers were, naturally, more likely to park and get out if they didn’t want to wait. But now, personal safety comes into play. Why guests pick the drive thru isn’t just about convenience.
Which brings Starbucks to another fast-moving update—curbside. In addition to the convenience draw here, curbside provides customers another COVID-ready option. They place their order via mobile device, pull into a designated parking spot, and wait for an employee to bring out the order.
“That is working beautifully,” Grismer said. “That’s taking pressure off the drive thru, and it’s accommodating more of that customer demand.” From a store-level perspective, where Starbucks features drive thrus also happens to be where curbside fits. They’ll work in tandem more than replace each other.
Currently, Starbucks’ curbside system is live in about 800 restaurants. Within the next couple of months, Grismer expects the number to hit 2,000. He called curbside “an important enabler” in Starbucks’ climb back.
The rewards change really can’t be understated, either. Starbucks Rewards transactions accounted for 44 percent of U.S. tender in Q2. “We do expect, as we've observed with Starbucks Rewards previously, that when customers make the move and we're able to build that relationship with them and bring to bear our personalized marketing, their frequency increases and their average spend increases,” Grismer says.
Starbucks’ loyalty strength allows it to spend marketing dollars more efficiently than competitors. Its marketing spend is about 1 percent, whereas other category chains are generally in the mid-single digits. “And we see the opportunity to continue to realize efficiencies, not only through our loyalty program-oriented marketing, which includes the personalized marketing that we do as we build these relationships with our customers, but also through social media and traditional media,” he said.
Grismer also briefly touched on Starbucks’ decision to launch its pumpkin-centric fall lineup August 25—the earliest recorded release date in the company’s history of the PSL, which dates back 17 years. Here’s a look at how traffic trended in response.
“I think it just goes to show you that in the current environment, customers are looking for a taste of something familiar, something that helps them feel that they've returned to a sense of normalcy,” he said. “And that's what Starbucks as a brand represents for many customers, and that's what a product like Pumpkin Spice represents for so many of our customers as well.”