Can Starbucks New CEO Brew Up Solutions for Its Mobile App Woes?
As Starbucks prepares to welcome its new CEO, Brian Niccol, on September 9, all eyes are on the company’s persistent mobile app issues that have contributed to declining sales and frustrated both customers and baristas. Fixing these operational headaches is expected to top Niccol’s to-do list as he takes the reins of the coffee giant.
The Mobile App: A Double-Edged Sword
Starbucks’ mobile app, once hailed as a revolutionary tool for convenience, has now become a significant pain point for the company. Mobile orders account for roughly one-third of Starbucks’ total sales, often leading to crowded counters, long wait times, and overwhelmed baristas. The complexity of mobile orders, with customizations like cold foam and syrups, not only boosts profitability but also increases the time it takes to prepare each drink, adding to customer frustration.
Howard Schultz, Starbucks’ former CEO who remains actively involved with the company, has openly criticized the app, calling it the company’s “biggest Achilles heel.” His experience at a Chicago location, where he witnessed a “mosh pit” of customers during peak hours, underscores the urgency of the problem.
The Operational Challenges Ahead
Niccol, who comes from a successful stint at Chipotle, faces the daunting task of revitalizing Starbucks’ in-store experience while maintaining the convenience that mobile ordering offers. Under the leadership of previous CEOs, Starbucks heavily invested in technology, but the company failed to anticipate the operational adjustments needed to keep pace with the growing demand for mobile orders.
The company’s current CEO, Laxman Narasimhan, acknowledged the struggle to meet morning demand and the risk of alienating customers with long wait times. The mobile app’s prioritization of digital orders over in-store ones has added pressure on baristas, leading to burnout and fueling the unionization movement that began in 2021.
Learning from Chipotle’s Playbook
Niccol’s experience at Chipotle, where digital sales have become a strength rather than a burden, offers valuable lessons for Starbucks. At Chipotle, Niccol oversaw the installation of second prep lines dedicated to digital orders and the introduction of “Chipotlanes” for online order pickups, reducing bottlenecks and enhancing efficiency.
Starbucks has already begun implementing measures to improve service, including the rollout of its “Siren Craft System” and updates to the mobile app that allow customers to track their order progress. However, these changes may not be enough to solve the deep-rooted issues.
The Road Ahead: Drastic Measures Needed?
For Starbucks to regain its “third place” status — a welcoming space between work and home — more drastic measures may be required. Expediting the installation of new equipment, which is currently only expected to reach 40% of North American locations by the end of fiscal 2026, could be one way to significantly reduce service times and ease the burden on baristas.
Niccol’s credibility and track record give him an advantage as he takes on these challenges. Analysts believe that if he can articulate a clear and effective plan to investors, he will likely be given the leeway needed to make the necessary changes.
As Niccol steps into his new role, the stakes are high. With a clear focus on optimizing the mobile app experience and streamlining operations, he has the opportunity to steer Starbucks back on course and restore its reputation as a leader in the coffee industry. Whether he can successfully blend these solutions remains to be seen, but one thing is certain: the pressure is on to deliver a winning brew.
