- As Starbucks continues its “get back to Starbucks” plan to revive slumping sales, the company announced it will implement an OpenAI-powered chatbot to remind baristas of drink recipes and assist them with equipment troubleshooting. Analysts told Coins2Day the move could help streamline hiring and efficiency, but it also carries with it the pitfalls of AI, including the potential for hallucinations and outages.
Starbucks is betting on AI to give its baristas some extra help behind the counter.
The Seattle-based coffee chain announced Tuesday the launch of “Green Dot Assist,” an AI-powered virtual assistant intended to simplify baristas’ jobs and fulfill orders faster. Starbucks will pilot the technology created with Microsoft Azure’s OpenAI platform at 35 locations and will roll it out nationwide next year.
The AI assistant will pull recipe cards of drinks to show baristas how to make them, as well as suggesting swaps if ingredients run out, the company said. The tech will also suggest food pairings to suggest to customers, provide troubleshooting support for malfunctioning equipment, and help managers find employees to backfill shifts should a store be short-staffed.
“It’s just another example of how innovation technology is coming into service of our partners and making sure that we’re doing all we can to simplify the operations, make their jobs just a little bit easier—maybe a little bit more fun—so that they can do what they do best,” Starbucks chief technology officer Deb Hall Lefevre told CNBC.
Starbucks first announced the tech at its Leadership Experience event on Tuesday, when it also unveiled plans to expand the position of assistant manager by adding the role to “most company-operated stores in the U.S,” hiring about 90% of management internally.
The swath of labor changes are the latest in CEO Brian Niccol’s efforts for the company to “get back to Starbucks” and revive its cozy-coffeehouse reputation amid slumping sales. The company reported in April its fourth straight quarter of same-store sales declines, in part a result of economic uncertainty putting a damper on demand.
As part of the turnaround efforts, Starbucks will have to draw on its big brand name and past goodwill from customers to refocus on what made the chain popular to begin with.
“All brands drift over time, and I have pattern recognition,” Starbucks CFO Cathy Smith told Coins2Day in April. “I’ve seen this with a number of brands, and the great ones recapture what made them great.”
AI behind the counter
The move follows the lead of other restaurant chains deploying AI. Yum! Brands, the conglomerate behind KFC and Taco Bell, has partnered with Nvidia to take drive-thru and digital orders. McDonald’s, however, cancelled its contract with IBM after two years and returned humans to drive-thru order-taking.
While restaurants have had mixed results with AI, analysts see Starbucks’ recent moves to leverage the technology as largely positive, so long as the company uses it effectively.
Logan Reich, an analyst at RBC Capital, told Coins2Day that while the introduction of an AI chatbot won’t be instrumental in increasing revenue, it can help train and onboard staff more efficiently, particularly as the company invests in internal promotions and giving employees more hours. Announcing new management opportunities alongside implementation of AI tools also sends the signal to workers that AI won’t be taking their jobs anytimes soon, according to Gadjo Sevilla, a senior AI and tech analyst at eMarketer.
“What they’re trying to show here is that, with regard to adoption, is that they can make it work with longtime staff,” Sevilla told Coins2Day. “So it’s not replacing jobs, it’s enhancing jobs, with regards to the new hires.”
But as with any rollout including AI, Starbucks may experience hiccups like hallucinations.
“Making sure that the chatbot is accurate and providing in an accurate way and not causing more issues—I think that’s going to be a critical aspect of rolling out to a broad storebase,” Reich said.
Sevilla warned the tech may experience more profound problems, from security breaches to outages—like the one ChatGPT experienced Tuesday—that are associated with a company using tools outside its immediate premises. As more restaurants figure out how to integrate AI into their point of sale, they may look to see how effective Starbucks was in leveraging the tech.
“This is going to be a litmus test for AI integration at this scale,” Sevilla said.