This drive-thru focus fits into Starbucks’ broader outline—grow comps and visits through efficiency and accessibility across COVID-19-ready channels.
And that’s where the definition is truly evolving for Starbucks.
The brand’s growth was historically defined by agile and blended formats, which is partly why Starbucks closed 2019 as the second-largest chain in the country at 14,825 locations (trailing Subway at 24,798). As of June 28, there were 15,243 Starbucks in the U.S.
Generally, this meant complementing traditional Starbucks stores, or the so-called “third-place experience,” with drive thru and mobile order pickup outlets to serve consumers’ need for convenience.
Now, in addition to the handheld devices, Starbucks will deploy a new curbside pickup experience across 700–1,000 locations by the end of Q3.
In urban core markets where drive thrus and curbside aren’t feasible, Starbucks plans to reposition store formats, Johnson said, to create a blend of traditional units with new “Starbucks Pickup” locations. These are smaller footprint venues that offer a walk-through experience relevant to guests in dense, urban trade areas. Each of these Starbucks Pickup stores will be (ideally) located within a three- to five-minute walk from typical Starbucks cafés, Johnson said. The company expects to accelerate the development of more than 50 of these over the next 12–18 months, with a view to have “several hundred” over the coming three to five years.
Curbside and drive thru, in particular, will be key to unlocking the mid-morning, early afternoon business that’s surged lately for Starbucks. It was coming on pre-virus, but received a jolt from changing preference.
Starbucks tested curbside in about 250 stores, Brewer said. The company built out the option with tech, where customers can access it from Starbucks’ app where available. “Trying to bring the lobby to door side,” Brewer said.
“Between handheld and curbside, we feel like we're going to be able to deliver a different customer service and it will unlock and enable some efficiencies that we need, and speed,” she added.
Beyond the contactless drive, these initiatives are critical for Starbucks given COVID-19’s proficiency to either expose or accentuate competitive strengths. Arguably the lead point for Starbucks in recent years has been its digital assets. In Q3, the brand witnessed significant acceleration in the number of users who downloaded Starbucks’ app and joined the rewards platform, totaling 3 million in the period—up 17 percent from Q2. Additionally, Johnson said, engagement with rewards customers outpaced non-loyalty users with year-over-year sales growth from the first turning positive in early July. As a result, Starbucks Rewards as a percentage of tender in Q3 rose 4 percentage points from a year ago to 46 percent, above the pre-virus trend.
Customer usage of mobile ordering also jumped 22 percent of total transactions, a rise of 6 percentage points.
Recently, Starbucks announced plans to update its loyalty program by giving members more payment options and ways to earn “Stars” though the app. Starting fall at corporate locations, guests will be able to pay with cash, credit/debit cards or select mobile wallets and earn Stars toward free items. The big change is they won’t be required to preload a Starbucks card within the app.