Starbucks was a pioneer of the mobile-first shop. Now its getting rid of them
Starbucks, which announced its sixth consecutive quarter of falling same-store sales on its earnings call Tuesday, opened its first mobile-only location in Manhattan's Penn Plaza in 2019. The store concept centered on a speedy, transactional experience that required consumers to place orders and make payments in advance on their phones. These locations did not have any seating to encourage latte drinkers to stick around, either.
In retrospect, the concept foreshadowed an era of mobile-first, quick-service restaurant designs in response to changing consumer habits due to the pandemic and following economic inflation, and that's often meant a de-emphasis on dining rooms. Chipotle's digital-only restaurant to Chick-fil-A's all-mobile pickup restaurant are two such examples.
While the idea behind the Starbucks mobile-only stores was well timed to the rise of contactless, takeout, and delivery fast food options, as Starbucks seeks to chart a comeback, the model no longer fits its strategy as it emphasizes its cafe experience.
'We found this format to be overly transactional and lacking the warmth and human connection that defines our brand,' Starbucks CEO Brian Niccol said on the earnings call.
Between 80 to 90 of these locations will close by next year while some may be converted to traditional coffeehouses with seating. That doesn't mean Starbucks is moving away from mobile ordering, which accounts for 31% of transactions, but where the coffee shop has a physical presence, it wants somewhere guests can feel welcome. Niccol said a forthcoming prototype of a new small-footprint cafe will have a drive-through, room for 32 seats, and about 30% lower building costs.
As Starbucks has brought back details like handwritten notes on coffee cups and an updated barista dress code and plans future store uplifts, a mobile-only storefront isn't the brand experience it's after anymore. It's not just about the coffee, it's about the coffee shop.
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