Starbucks sales continue to outpace the quick-service industry; in its fiscal third quarter, the coffee giant saw global comparable sales increase by 4 percent, even as overall restaurant sales growth softened. But the company’s growth would scarcely be possible had the company not made gigantic strides at the drive thru in recent years.
Yes, Starbucks has now clearly emerged as an innovator in the drive thru, lauded for new mobile payment and ordering systems, as well as bringing its distinctive in-store experience to the drive thru. For a company that has been praised virtually since its inception, this may come as no surprise. But five years ago, Starbucks’ drive thrus were nothing special by the company’s own admission—not even on par with other drive-thru concepts. The story of its rise to industry leadership includes adopting a new way of looking at the business through individual customer zones, several “aha” moments, and a commitment to developing solutions based on customer needs and behaviors.
Early on, Starbucks’ customers told the company they wanted a drive-thru option. But several years ago, Starbucks’ drive thrus had “hit a wall.” They lacked differentiation; communications were limited to menuboards. The brand was nowhere near best in class. The vision was to find ways to think differently about the drive thru. What could be done to speed throughput, increase transactions, provide better service, and grow ticket? What could be done to make the Starbucks’ drive-thru experience dazzle its customers? Where to start?
The answers to these questions show a company willing to change in order to generate continuous improvement.
Initial audit leads to customer operating zones
Starbucks asked King-Casey to evaluate its drive thru and make recommendations. The first step was for King-Casey to do an audit of drive thrus in the Seattle area, looking at Starbucks’ operations through the lens of the customer. A small team of Starbucks executives accompanied King-Casey, and they found the results eye opening, to say the least. 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; at one point, one of the members said, “There aren’t even any signs to mark where the drive thru is.” The audit provided the first “aha” moment for Starbucks: the drive thru was something more than just an order point.
COZI then enabled Starbucks to home in on the solutions. The acronym stands for Customer Operating Zone Improvement, and it is a methodology pioneered by King-Casey. Starbucks cafes are not just branded boxes. Rather, each store is a collection of many individual “customer operating zones,” and customers behave differently in each one. Their needs and expectations are different. Their attitudes and mindsets are different. Each of these unique zones is right for one merchandising strategy and dead wrong for another.
COZI is applicable both inside a restaurant and at the drive thru. In this case, Starbucks needed to identify each of the drive-thru zones, such as approach, entry, pre-order, order, pickup and pay, and exit zone. The company needed to understand how customers behave in each zone, what their needs are, and establish specific business goals for each zone.
The COZI methodology was introduced to Starbucks at two half-day management workshops, each attended by 20–30 executives, a combination of senior officers and line managers. These “roll up your sleeves” sessions built on the enthusiasm for the audit results and an understanding of the possibilities for significant growth, as well as the need to change internal culture. As a result, Starbucks made the requisite time and resource commitments for a new drive-thru experience.
Recognizing customer zones was a breakthrough moment for Starbucks. Instead of thinking about the drive thru as a whole, Starbucks started thinking about the different and distinct customer zones. Being able to dissect the drive thru into key customer operating zones helped Starbucks think through many different improvement opportunities. New zone-specific 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.
These changes alone made a big difference in sales performance and customer satisfaction that exceeded expectations. But Starbucks didn’t stop once it nailed zone-specific messaging. The team asked King-Casey to return to evaluate their progress. We pointed out that they had definitely made significant evolutionary improvements and could now be considered equal to best in class in the drive thru. King-Casey also challenged the company to continue to make revolutionary changes that would vault it to world-class leaders. To its credit, Starbucks accepted the challenge—and met it.
First, it set out to identify what else it could do to provide its drive-thru customers with the same Starbucks experience they enjoyed inside the store. That took some creative ideation—focusing on clearly understanding customer needs—and even inventing new technological solutions. Here are a few examples:
- The “digital barista.” Ultimately, the key element in making the drive-thru experience replicate what the customer feels indoors is the addition of a 46-inch digital screen that allows customers to interact live via two-way video with the baristas who serve them. The innovative digital display—now in testing—also serves as an order-confirmation communicator, and promotes (in real time) available bakery items and suggest-sell promotions to increase incidence of food attach to beverage orders. The tests to date have been highly successful. Customers love it, particularly the unique ability to see and chat with their barista. Most recently, a YouTube video of a Starbucks barista in St. Augustine, Florida, communicating via American Sign Language with a deaf drive-thru customer went viral, generating millions of views. The “digital barista” offers another object lesson that might be less obvious. It capitalizes on Starbucks’ greatest asset—its people—and their relationship to customers. But that relationship is only possible because of the tremendous scrutiny Starbucks uses in its hiring process and the training it provides its baristas. That is the foundation for success, and a reason why few other restaurants could replicate the success of the digital barista.
- Mobile ordering support. Starbucks is firmly established as a leader in mobile customer service. In its annual Drive-Thru Performance Study, QSR reported that “already the Starbucks App allows customers to pay with their smartphones inside stores or in the drive thru. Last December, the company launched a pilot program of its Mobile Order & Pay platform in Portland, Oregon, and it has since expanded to more than 3,400 stores nationwide.” The company is now using the digital technology that’s in its drive-thru lanes to support mobile order transactions.
- Branded wayfinding at the drive thru. Customers had been having issues identifying stores that had drive thrus, and smoothly navigating through them. Starbucks added unique branded chevron arrows and “Starbucks green” pavement stripes to help customers quickly find and easily navigate the drive thru.
More “aha” moments
Starbucks did considerable testing to validate new solutions as they were developed. One area of great opportunity—increased food sales at the drive thru—was initially imperiled by an internal cultural concern that images of food on the menuboard would cheapen the Starbucks image. But positive customer feedback in tests showed Starbucks it was working and enabled the company to capitalize on the food opportunity. Starbucks now prominently utilizes visuals on its interior menuboards, as well.
Another “aha” moment occurred about a year into the testing. There is a saturation point for messaging within individual customer zones. Depending upon the zone and how customers use it, there’s 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 developed to help Starbucks manage “Total Store Messaging” within the drive thru. This ultimately helped increase customer throughput.
The dramatic business improvements that resulted from Starbucks’ reinvention of the drive-thru have initiated 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. The goal is to continually improve the experience anticipating that drive-thru sales will account for the majority of its business.