Starbucks faces its share of challenges as it works back from the company’s worst traffic performance outside of the pandemic or the Great Recession. Less consumer-facing than some of the value and menu innovation on deck, though, like its first texture offering, “Pearls,” and the decision to open the Starbucks app to all—not just loyalty members—are operational fixes designed to hasten the brand’s execution and address complexity within stores to get drinks in front of guests.
A Starbucks in Plano, Texas, has been piloting what the company calls the “Siren Craft System,” which is intended to create “new ways of working, resulting in easier in-store operations and higher customer satisfaction,” the company said.
On a typical day in that unit, Starbucks shared, customers “hardly ever amassed at the mobile order and pickup counter, even during busy hours.” Additionally, “the drive-thru operation was smooth, and partners managed their tasks with ease, between catching up with their regular customers and joking with each other.”
It noted the improvements came “through surprisingly simple changes.”
The friction can’t be understated. Starbucks in Q2—the period when traffic dropped 7 percent and same-store sales declined 3 percent (4 percent higher ticker partially offset the across-the-board earning miss)—noted 60 percent-plus of its U.S. morning business flowed from rewards members. That 33-million-member group, whose 90-day active figure declined 4 percent on a sequential basis in the period—naturally, overwhelmingly, orders from the app. However, even with mobile order and pay sales rising for the brand, Starbucks reported a mid-teens percent order incompletion rate within the channel. In other terms, customers tapped the option to put items in their cart and never hit send. CEO Laxman Narasimhan credited the gap to users “citing long wait times of product and availability.”
The brand in Q2 said it was revamping and reinvesting in tech to improve wait time estimates and provide transparency for guests, suggesting some showed up after ordering ahead and still had to queue up well past when they expected to. There are incidents as well where the brand has had to shut the channel down to focus on drive-thru, given peak business coming outside the restaurant as well as inside, and the inability to the prepare drinks ready for pickup.
“Prior to Siren Craft System, we were hearing from some of our partners at certain stores that they felt overburdened during some of our busiest times. They didn’t have many ways to anticipate that demand or respond,” Kionte’ Sheffield, the district manager who oversaw the pilot project before it had a name, said in a statement. “With Siren Craft System being a solution by partners and for partners, we have an ease of operations—we’re more efficient without it feeling difficult.”
If the name sounds familiar, it complements and build upon Starbucks’ “Siren System” package unveiled in 2022. That series of tech and equipment changes was geared toward stripping steps out of the craft-beverage curation process.
A revamped kitchen layout added equipment to speed drink production and make baristas’ jobs easier. It cut the need for workers to open refrigerators while making cold drinks. There were features like a custom ice dispenser, faster blenders, and a milk-dispensing system. And the blockbuster was Starbucks’ Clover Vertica system, which can serve a cup of coffee on demand in less than 30 seconds. Each machine is topped by six hoppers and brewers don’t require paper filters. Previously, every 30 minutes, employees would need to grind coffee beans, batch it in paper filters, and brew. They threw away anything unsold each half hour—a cycle of grind, batch, dump, do over.
“Siren Craft” was hinted at in Q2. Narasimhan told investors Starbucks, in its Tryer Center, had spent the previous six months working to unlock additional capacity. “And what we saw through store tests was a real near-term opportunity to fundamentally improve how we operate our stores,” Narasimhan said. “The Siren Craft system, as we’re calling it, requires no capital.”
In units, like Plano, where Siren Craft was live, Starbucks said there was an increase in peak throughput, which the brand estimated could be worth nearly a comp point annually. It set a goal to reach 10 percent of stores by year’s end.
Tuesday was really the first time Starbucks pulled the curtain back. “We started this project in 2023, testing some of these improvements and getting feedback from our partners on what would be most impactful for them,” said Sara Trilling, executive vice president and president of Starbucks North America, in a statement. “We then really started to look at how we can tackle this latent demand and be more efficient in our stores. We looked at beverage sequencing, beverage routines, and also new positions to respond to the demand in our stores and work through it more effectively while partners are feeling supported.”
The system includes new routines for popular beverages, such as streamlined steps for creating orders, as well as new positions and digital tools to anticipate and meet demand.
One key modifications employees helped develop, Starbucks said, was a change in what it labels “beverage sequencing,” or where milk gets steamed before espresso shots are pulled. Employees through tests realized they could save time by reversing the process and pulling espresso before steaming milk.
“The role of Siren Craft System is really about helping to capture the demand that we have by shortening customer wait time while elevating connection, elevating the quality of our coffee, and celebrating the craft of our baristas each and every day,” Trilling added. “It’s got to be all those things. It cannot just be about speed.”
Starbucks claims the Siren Craft System will give employees chances to take a breath and practice new drinks or provide one-to-one guest experience since they’re not constantly scrambling.
In that vein, during peak times, Starbucks added “Peak Play Callers.” The updated role “offers greater flexibility to support baristas, supported by digital tools,” the company said.
Essentially, the employee floats around and offers support where needed. An example of the tech mentioned is a new Digital Production Manager tool that allows employees to anticipate bottlenecks and react accordingly.
Starbucks said there’s been an increase in throughput during busy moments at stores using Siren Craft, “significantly reducing customer wait time, and a tangible improvement in out-of-the-window times.”
The rollout is well underway. As of June, 1,160 U.S. stores were live with Siren Craft and Starbucks said it was on track to scale nationally in the U.S. and Canada by the end of July.
As this evolution continues, Starbucks is also working to scale Clover Vertica. That’s being paired with the global launch of Starbucks Milano Duetto light and dark roast options.
Starbucks is doubling down on AI “Deep Brew” technology as well to improve wait time estimates.
Some other efforts in progress include unlocking new dayparts—in Q1, Starbucks mentioned testing a program to serve consumers between 5 p.m. and 5 a.m., when stores traditionally close. During the pilot, executives said, Starbucks doubled its business. It’s now actively pursuing options to build what he said can be a $2 billion business over the next five years.
Overall, Starbucks plans to invest $600 million over the next three years to digitize stores and better target customers via personalized deals. This comprises digital menuboards across all U.S. company stores in the U.S. and China.
With AI, Starbucks expects to curate offers timely, relevant, and flexible to location, inventory, and weather. The investment boasts a new revenue management solution as well.
And with opening the app for all, slated for July, Starbucks plans to clarify value points for customers who aren’t already loyalty users and launch an omnichannel campaign to remind customers “that the best offers are in the app”—an effort that will target occasional and non-rewards guests.
