Starbucks rolled out its promised “Back to Starbucks” changes this week, reintroducing practices meant to transform the hectic coffee shops back into places where people will happily linger over a latte.
Under the new marching orders instituted by still-new CEO Brian Niccol, baristas are expected to scribble customer names on to-go cups again instead of relying on printed labels, and serve to-stay drinks in actual mugs, both of which were common practice before the company pivoted to becoming a kind of rather chaotic mobile-first, low-touchpoint retailer.
These new-again habits have already taken hold at some stores, Danilo Gargiulo, an equity research analyst for Bernstein, discovered. On early morning visits to California shops, he found signs of efforts to overhaul the vibe. “I’ve seen with my own eyes how they’re trying to shape it,” he told Coins2Day.
He added that he’s optimistic it’s a matter of months until Starbucks customers find the brand has changed, and that the company is moving in a positive direction. And although he and other analysts expect little change in the sales figures that have bedeviled the retailer when the company reports first-quarter earnings today, Gargiulo says he’ll be listening for subtle signs that a back-to-the-future shift is afoot.
Evident change
Besides the mugs and magic markers, this week’s new-era program includes the introduction of free refills of hot or cold coffee or tea following the purchase of any in-store drink, as well as the return of the self-serve condiment bar.
Niccol has also enacted a new code of conduct that allows only paying customers to hang out in the shops and use the cafés’ bathrooms, six years after the store instituted an open-door rule. This new charter is meant to make the restaurant less crowded, freeing up tables for paying visitors looking for a calm space and a bathroom that isn’t perpetually occupied.
On his Starbucks runs in Los Angeles and San Diego, Gargiulo said he was pleasantly surprised to see three of these tactics already in play: He was handed a ceramic mug because he was ordering in, the bathrooms now required a code to enter, and nonpaying customers were asked to exit the store.
“One of the baristas told a person that was sitting at a table to either order at the counter or leave,” says Gargiulo. That person, who had brought in food from a competitor to eat at a Starbucks table, left without protest.
“I was surprised that these three things happened to me, literally to me, on day one of these rollouts,” Gargiulo said.
The analyst acknowledges that it’s impossible to extrapolate from such a small sample, and that many aspects of the new era will take time—Niccol plans to keep investing in staff, for example, while tweaking the overly complicated menu . But Gargiulo expects that most Starbucks stores will feel different within months, not years. He says just holding a mug gave him a visceral sense that it was time to slow down.
“It does look like people are chilling out,” he says. “I’m just looking at a person right now, having her piece of banana bread while drinking a coffee. The store looks a little bit more relaxing.”
An enormous task
To be sure, it is still early days in Starbucks’ attempted turnaround, and change isn’t happening without a few hiccups.
At four locations in New York City spanning both residential and commercial neighborhoods, this reporter spotted signs touting free refills at several Manhattan locations, but only one ceramic cup in use. The condiment bar was available at two shops, while baristas at every shop were still using labels to print out customer names. Asking for a “for-here” drink prompted one manager to rip open a brand new box of mugs, while other staffers watched with curiosity.
At a Starbucks near Central Park, one nonpaying woman seemed put out by the lack of access to a bathroom, yelling “What’s this about?” As she pushed her way through the crowd, found her way into the restroom anyway, then opened the door to yank in a friend, locking the door again as tourists politely waited.
There are thousands of company-operated Starbucks locations in the U.S. Alone, and no one could expect even Niccol, the turnaround star who transformed Chipotle’s operating model, to flip a switch and see overnight results. Customers have become accustomed to a frenetic system in stores, where to-go orders make up 70% percent of orders, driving a grab-and-go mentality that reduces the store itself to a supporting role.
But the early changes are hopeful, according to the analyst. Knowing Chipotle’s history, he adds, “believing that Brian [Niccol] can replicate the same capabilities inside of Starbucks is kind of a given.”
