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Will Starbucks Cut Wait Times With Mobile Orders?
The following post has been brewing in my mind and I just now realized that was unintentionally bad pun on my part. You’ll see why in a moment. Starbucks is expanding a new mobile order service that lets customers place their drink orders prior to arriving at the coffee shop. The idea is to cut down the wait times by having the drinks ready when you get there. All you have to do is pay when you arrive.
However, I started thinking about the issue from the perspective of a budding economist, which I am. The Starbucks down the street from my office is patronized by the professionals who work in the nearby office buildings and jammed every day at lunch. Now, if everyone placed their order on their phone 20 minutes earlier it seems to me that all you’ve done is shifted the demand to an earlier point in time.
Reflecting the progress I’ve made from grad school, I realized that I’m making a few assumptions. I’m assuming a given amount of customers that doesn’t vary much from day to day. I’m also assuming a given level of employees and productivity (say, lattes-per-hour) that also doesn’t fluctuate. I’m also limiting myself to those “rush” periods in the morning or at lunch when you get a spike in customer traffic. That is, presumably, where the mobile order option provides the greatest value-added.
That being said, I can see where Starbucks can gain greater efficiency. Sometimes you’re stuck in line behind a woman who sounds like James Bond ordering a martini so you’ll cut out that wasted time from the process. I also wonder if knowing the drink orders in advance makes a difference to the employees but that may matter less with more experienced baristas. Unless I’m missing something this seems to be a wash, or maybe a slight net gain.
Ideally, you’d only want a portion of your customers to adopt the new option. That way, you can avoid transferring the logjam from in-person orders to mobile orders. If you really want to provide people a way to get their drinks faster then I think Starbucks would have to adopt a more dynamic pricing system which discriminates based on those preferences. For example, if you want to take the “express” route then you can pay a premium on top of the normal price to get your drink faster, otherwise you wait with everyone else. It’s like Uber’s peak-demand pricing when there’s a spike in customers looking for rides.
This probably a simple topic that I grossly overthought but it’s an interesting economic question. I will be curious to see if Starbucks, or anyone else, tries to find out if the service actually decreased wait times, ceteris paribus.
Published in Economics, General
When I was in grad school, I would frequently order my lunch (and pay for it) using Chipotle’s app. Then when I got to Chipotle, I could breeze past the whole line and pick up my lunch. At that location, they made all of the to-go orders in the back kitchen which was surely more efficient for them, and at no premium to me.
In a nutshell, I think that only a portion of customers will adopt the new method of ordering — likely the customers who go there every day anyway. These orders can be processed more efficiently by a dedicated barista, with negligible impact on the store’s ability to make drinks for the walk-in customers. They might even get more walk-in customers as a result since a long line is more off-putting to moderate coffee drinkers, or those customers that go to Starbucks less frequently, than to those who need their fix at 2pm sharp every single day.
An I.V. drip bag of caffeine laced fluid with a wheeled support mechanism so you can hail a cab seems to be the most efficient system with an Amazon drone landing on your head and replacing the bag while injecting a syringe in your neck to sample the caffeine concentration in your blood, thereby adjusting the dose so that you can repeat over and over:
“More human than human is our motto.”
I have nothing to say except to note that Ms. Ludlow is back.
I never really left… I just lurked. Like Joe Biden but not as handsy.
There’s a joke there but I’m not touching it.
I prefer machine coffee, plus the machine just ignores me when I try to have a discussion about race.
Actually, a good post about the margins and speculation on what Starbucks considered in attempting this. You can have predictions about incentives, but there very often is some costly trial and error process to work through . . . and it won’t likely be the same optimal solutions in all locales.
It’s an interesting question. I think one factor in Starbucks’ deciding to try this out is that, like other fast-food restaurants, they want to draw in more customers by offering more alternatives. The alternatives become complicated to order. That can be a stressful and time-consuming conversation between the wait staff and the customer. Starbucks wants to offer personal service. I would bet many people will welcome the opportunity to just punch in their choices rather than trying to say them each time.
One of my kids worked at Friendly’s years ago when they began to offer the soft frozen yogurt with choices of two dozen stir-ins. The conversations I overheard between the counter staff and the customers were painful to listen to. It was hard on the counter staff. There would be this very relaxed I-don’t-know-what-I-want customer or a mumbling customer and the poor kids straining to hear accurately. And heaven forfend if one of the kids got the order wrong.
As I watched these scenes play out day after day, I kept thinking, “Did anyone in the home office really see how this would work in real life?” Keep it simple.
I think some people will love using the aps. And the wait staff may be really glad to get the person’s order in writing. :)
They certainly save time on the tendering currency portion of the transaction.
I thought the lady ordering her coffee like James Bond was only at my local store.
Do you also have the wanna-be-barista-chemistry-professor-in-training? We have a couple of those.
The gain in advance ordering comes in prioritization of the orders. If 3 mobile orders come in for tall coffee, then 3 mobile orders for lattes, the barista can begin with the lattes first, knowing that the 3 coffees can be poured at the last minute. Obviously, this wouldn’t work in a queue situation where customers expect to be taken and served in order.
Get in your Starbucks posts now. Our new overlord is a cafeista and plans to add the word to the CoC.
So you can get burnt coffee that is cold by the time you pick it up. Sounds perfect.
King prawn you are letting your Seattle show.
The simplest “express” option, it seems to me, would be to have a “Coffee-only” line. Let people (like me) who only want a medium to get in and out without having to wait behind the complicated orders or overwhelmed by all the options orderers.
I thought I sorted you out on Facebook?
I’ve used the system, and it works because a: you don’t spend time at the store ordering, and b: you don’t spend time at the store paying. You said that you pay when you pick it up, but that’s not the case. You pay through your mobile app. Which is how I pay anyway.
It is true that if you don’t time it correctly, you will end up with a cool drink. Or perhaps you ordered an iced drink and now it’s a bit watered down. But you figure that out. Based on where you live or work, and where the Starbucks is, the time of day, etc.
It really does work.
Here’s your problem — unlike when one orders in person, the mobile app can take more than one order at a time. That means there’s no log-jam.
Another part of the efficiency is that the barista can look ahead, see there are multiple orders coming up that need steamed milk, and just steam one larger pot of milk instead of a cup at a time. That’s one of the longest parts of the process, so if it can be done less often, everything goes faster.
Can they get the mobile telepathy app finished?
I’d like my decaf Flat White sorted out before I get to the Molly Pitcher rest stop.
If you’re going to Starbucks for coffee, you’re doing it wrong. Starbucks is all about the customization – it’s selling that experience.
The real upside from remote ordering is the wedge it opens for totally automated coffee production. The machine only needs to be slightly smart to take a pre-vetted order from the ordering backend. As customers are trained, and as natural language recognition catches up, you can start replacing some of the front-line baristas as well…
I’m a bit of a luddite so unlikely to use the app. But I can say that one benefit to having a daughter working at Starbucks is she gets free pound of her choice of coffee each week. We are now hooked….
“Now, if everyone placed their order on their phone 20 minutes earlier it seems to me that all you’ve done is shifted the demand to an earlier point in time.”
But, the mobile customers can arrive later than they used to to pick up. So, maybe they actually order later than if they were in the store.
Also, I’ve thought of some other questions and observations:
Are they adding a cash register for the mobile orders? There are two sets of waits: the wait in line to order and the wait in line to pick up. If *$ doesn’t add a cash register for the mobile customers, they’ll still have the first wait (behind the James-Bond-y woman), but not so much the second.
If they add a cash register for mobile customers, are they adding a clerk for the new register, or will one of the baristim have to float to the new register as needed?
Where are they keeping the food and drink for the orders until the customers arrive?
How are they keeping the food and drink hot in the meantime?
There are three Starbucks in my vicinity and two of them have drive-thru windows. If one can place an order by app or by phone and have it ready, one still has to 1) walk in the Starbucks, get in the queue, and when your turn arrives, get the order; or 2) get in the drive thru and wait for the people in front of you to matriculate with their orders in order to get your pre-order (no pun intended) .
Will the app or call speed things up? Maybe. I have no real idea. Having the coffee (and the heated pastry?) waiting might lead to a cooling down period. Having burned my mouth with very hot coffee (but never spilling it in my lap and heating things I’d rather not have heated) that would work for me, but not perhaps for others.
However it might keep those customers from going to Dunkin’ Donuts, which is kitty corner from one of the Starbucks.
There’s a burrito — I use the phrase very loosely — chain in Boston called Boloco that has an excellent app that lets you order and pay in advance. I use it a few times a week.
I find it immensely convenient. First, I can actually time it so that my order’s ready by the time I walk from the metro to the store. Basically, I go in, give them my name, walk out 30 seconds later with my lunch. I don’t need to waste anyone’s time repeating my order or take space having to queue up. Everyone wins.
You actually don’t need to pay when you arrive. You pay through the mobile App.
It’s a HUGE time saver – the customer now enters the order and enters payment – two things that were previously done by an employee.
The customer has a direct line of communication to the barista. No more unnecessary middle-man at the register.
Think about it – if you order the same thing every day, and its relatively complicated, you have to taker the time to explain the order. Then the person at the register has to them explain it to the barista.
With the app, your previous orders are saved, so you just hit, re-order.
And the time it takes to make the payment in the store is now zero. No more swiping, no more making change, etc.
This is the future of all quick service. Especially considering minimum wage laws.
Like Spin says above, the payment is in the app. You can preload like a gift card and it just takes money off that card. And then you get a star and a free drink on your birthday. YAAY!
I’m just now seeing the comments for the first time since I posted this yesterday and I’m surprised by the response. I thought it might be a bit abstract, even boring, but it apparently resonates. What I’m not surprised by are all the great questions and thoughts from you all. From the snarky commentary I assume you all have seen You’ve Got Mail. I’m reminded of Tom Hanks’ monologue about the psychology of ordering complicated drinks.
I stand corrected on the point about paying in the mobile app, which does make a difference. Unlike Chipotle, though, I don’t think you can skip the line but correct me if I’m wrong. That would mean you can get stuck in a long line during a busy time.
It’s worth reiterating that there’s a fine distinction between how it works for a particular person and how it works on average for everyone. I was trying to get at the latter.
That’s something I suspect many people out there would want. Perhaps they should setup a do-it-yourself register where you can place orders for brewed coffee. In fact, they should probably just set up the brewed coffee so you pour it yourself. I’m sure they can design a machine that will only dispense coffee after you’ve paid.
My point exactly.
Great point, Amy. That confirms what I thought might be true. Perhaps the more experienced baristas can use the mobile order service to gain the greatest efficiency.
Regarding the app taking multiple orders, I think that might be helpful to a point. There’s still a limit to how many drinks a barista can produce in a given period of time. If they’re not operating at peak productivity then there’s room for improvement. I guess the question would be what’s the chance it creates a funnel in which a lot of orders are coming in, more than can be handled smoothly.
No, you skip the line. Your drink is just sitting on the counter waiting for you to pick it up. Yes, someone could take it, and that’d be an issue. But it’s never happened to me.
If you go drive through, then yes, the line.
I really doubt that could happen simply because most baristas could have huge gains in productivity by working multiple orders at a time. There’s so much inefficiency in the make lattes-one-customer-at-a-time system that off the top of my head, the mobile app could increase the number of orders by a third or more without increasing the average per order time.
Really, just hang out at the counter some time. Watch how often they have to do the same things for every order that if they made multiples a time they could skip.