Coffee giant Starbucks is expecting a $2.2 billion loss of earnings from the lockdown globally, but is focussing on making a return to trading with the accelerated development of its ‘pick up’ concept stores, based around mobile ordering and payment.
In the US, the retailer has seen sales drop by as much as 43% with its stores largely shuttered. Sales in China, where 99% of its shops were open by May, sales are still down 21%. However, the retailer says that despite this, those customers that are buying during lockdown and beyond are actually spending more.
As a result, Starbucks is looking to accelerate the roll out of its ‘pick up’ concept stores – smaller footprint stores with no customer seating, where customer order – ideally by app – pay and leave. The company says it planned to roll out these stores globally over the coming three to five years before the pandemic. Now it is looking at doing it much more rapidly.
Instead, the company is hoping that customers used to Starbucks being ‘the third place’ – to relax outside of home and work – will still want to enjoy coffee and food, especially breakfast, but on the go. It also is hoping that they will want to do it with the Starbucks app, which has already pioneered in app-payments and pay-by-face technology in the past.
“Starbucks recently announced the acceleration of their “pickup” store concept to meet their customers’ shifting preferences as consumers return to normal purchasing habits,” says Vijay Sondhi, CEO of NMI, a payments enablement technology company. “This goes to show just how crucial Starbucks’ mobile payment feature has been in maintaining customer loyalty during the pandemic and will continue to be as they roll out new store formats that prioritize customers on the go.”
Sondhi adds: “As Starbucks continues to seek new ways to engage customers, another option to consider is payment kiosks. Kiosks, which are already used by many fast food chains, offer consumers a unique opportunity to pay by card while avoiding interactions with a sales assistant — taking an additional physical touchpoint out of the purchase experience and thus helping customers feel more comfortable entering stores again. Taking it one step further, these kiosks can be equipped with contactless features, removing the need for customers to touch kiosks whatsoever while purchasing their coffees.”