Wednesday, July 12, 2017

Unintended consequences of the Starbucks app

In a 2015 post, I referred to Starbucks Mobile Order & Pay as a success. And frankly, it is - I remember back when I was a kid, we actually had to go INTO a business to order a drink and pay the money. Nowadays, you can order your drink AND pay for it in advance, and just pick the drink up when you get to the place. And, as Research & Markets has noted, proximity payment methods are not only becoming more popular, but also increase brand loyalty.

What could go wrong?

What if the ordering method becomes too popular?

While Starbucks has added a 15 percent increase in staff to its stores and is looking to add more down the road, 75 percent of polled workers said locations were not staffed to meet ... standards. Within the last three months, 62 percent of employees shared that the understaffing issue is impacting quality customer service.

Because while Mobile Order & Pay can reduce the workload at the cash register, it doesn't do anything for the workload at the food/drink production areas. And the baristas are apparently stressed.

So why did complete the survey? Because previously, someone launched a petition about Starbucks staffing. Excerpt:

The labor situation has gone from tight to infuriating. Labor has been cut so much in corporate stores, that one call-off (an employee calling in sick) impacts the entire day, as managers are directed to cut shifts to save on labor costs. Baristas trying to work more than 25 hours a week (myself included) find that a near impossible task. You end up taking it personally, when corporate directs your stores to understaff, and under schedule. You wonder if they realize how difficult it is to pay your bills when you work 25 hours a week?

And the survey mentions ANOTHER unintended consequence of Starbucks' loyalty innovations.

Before the implementation of a Starbucks Reward program (MSR), tips were higher. Now, with a growing percentage and majority of customers using the app, and their registered cards, tips are in major decline.

It's a common issue affecting numerous businesses - if someone gets food for free, why should they tip? (For the record, when my family uses the discounts provided by the Don Jose loyalty program, we calculate the tip based upon the pre-discount price. Oh, and I avoid Groupon deals.)

Naysayers would claim that perhaps Starbucks should just eliminate Mobile Order & Pay and the rewards program. That will reduce business to the old levels, and then employees won't be stressed until they lose their jobs.

The reality is that if customer service truly declines - and a survey such as this one can't really measure the level of customer service - then Starbucks will have to launch a NEW initiative to increase customer satisfaction.

(I'd say more, but I can't.)
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