How do you adjust your business to cope with changes in market behaviour that have emerged since the Covid pandemic?
It’s a question that the bosses of all major chains will have asked themselves repeatedly and, in most instances, new technology and equipment form at least part of the answer.
Just look at some of the comments made by Starbucks CEO Howard Schultz recently. He pulled no punches when admitting that the brand’s existing stores simply aren’t equipped to cope with the unprecedented levels of demand it is seeing for its products and the ways in which customers are now customising and placing their orders.
According to Schultz, Starbucks will spend $1 billion (£800m) this year modernising the business, including new equipment, training and wages.
In the last couple of months, Schultz has met with thousands of retail store partners to get a handle on the issues they face and concluded that its stores need upgrading to tackle labour challenges and rapidly changing consumer trends.
‘Productivity’ is the name of the game and, while Schultz’s plan of action is formed by what he’s heard from partners in the US, the reality is that the same issues plague partners in other territories around the world, including the UK.
“The equipment in our stores and the layout of the stores have not been designed for the way customers are using our stores today. And that has put enormous pressure on our people,” he conceded. “So, the first thing we must do is give them new tools, and there will be upgrades in equipment that will be sequentially brought into the stores to try and relieve them on the pressure.”
What does all this mean in reality? Well, you can expect to see Starbucks make a larger outlay on training to give workers the self-confidence to do their jobs and lower attrition rates.
But, significantly, you’re also going to see better equipment behind the counters to boost output and eliminate painpoints.
Investments in coffee machines and high-speed ovens are very much on the cards, along with handheld order points for drive-thru and a sharpened focus on cold beverage stations to increase the capacity of cold beverage work areas for partners.
Schultz admits that Covid disruptions “interfered” with Starbucks’ ability to make the required investments in store design, operations, infrastructure and technology.
He’s certainly determined to make up for lost time.
