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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
I think Starbucks needs to create a Keystone pipeline from the dairy cows direct to a pasteurizing staging area and then into their stores. I suppose cats would be milling around waiting for leaks but Claire will just have to live with it.
Udder nonsense.
I cannot have meant this. I must’ve meant that they arrive later than they would otherwise.
Oy! I am so 20th Century.
The only connection I have with Starbucks is that Ricochet sets its fees by it.
Actually, good coffee is ground immediately prior to brewing. Not a half hour before, not ten minutes before. And it is served immediately after brewing.
There are times when I’d pay a buck or two more to have it done right. If a mobile app helped make it possible, that would be fine. But that would be for times when I’d want to be immobile and sit and savor it from a mug.
If you’re going to use milk or cream it probably doesn’t matter so much.
If the roaster didn’t label the beans with the date of the roast, it isn’t going to be the good stuff. Light roasts need to age a few days, but medium roasts are at their peak about a day after roasting. Dark roasts don’t matter, as with those you taste the roast, not the coffee, though they do go stale faster.
Dunn Brothers roasts their own beans, and labels the bags with the date of the roast. Each store has an expensive Diedrich roaster. But all of the franchises roast their coffee too dark, and some of the franchises roast too fast, or something, giving the coffee has a strange taste when cool. (Cold coffee isn’t bad. Bad coffee is bad.)
The best roaster I know of is Roaster Jack in Traverse City, MI.