As new Starbucks CEO Brian Niccol begins his first week at the Seattle-based coffee chain, he laid out his plan for “refocusing” the Starbucks brand in an open letter to customers, employees and investors.
In the letter, Niccol conceded that the brand had “drifted from its core” of being a “welcoming coffeehouse” and laid out a four-point plan to right the ship, including empowering baristas with the best tools to do their jobs, meeting customer expectations on quality and service, elevating the in-store experience, and telling the Starbucks brand story.
“Many of our customers still experience the magic every day, but in some places — especially in the U.S. — we aren’t always delivering,” Niccol said. “It can feel transactional, menus can feel overwhelming, product is inconsistent, the wait too long or the handoff too hectic. These moments are opportunities for us to do better.”
After two straight quarters of declining sales and traffic, Starbucks parted ways with former CEO Laxman Narasimhan last month and now hopes “to do better” with Niccol at the helm, who made his way from Chipotle to Starbucks on Monday of this week, and has hit the ground running. Niccol laid out four main points of focus for his tenure at Starbucks moving forward:
- Empowering baristas with “the tools and time” to make drinks and personally deliver them to each customer. The company will also make sure to offer “career opportunities and a clear path to growth” for baristas.
- NRN take: With the rise of unionization at Starbucks, the company has been struggling to improve employee satisfaction. Starbucks has already rolled out new equipment and the recent “Siren Craft System” to help baristas meet demand. Niccol has the opportunity here to ramp up technology investment to further improve barista experience.
- Meeting customer expectations for “delivering outstanding drinks and food, on time, every time.”
- NRN take: The expectation here is that Niccol will bring the machine-like efficiency and quick make times Chipotle has become known for over to Starbucks. The challenge here is that Niccol’s experience is mainly in food, and Starbucks’ menu complexities could present a challenge here. We would not be surprised if Starbucks begins paring down its “overwhelming” menu.
- Reestablishing Starbucks as a ‘community coffeehouse’ by “elevating the in-store experience” and making stores “inviting places to linger” with “comfortable seating” and “thoughtful design.”
- NRN take: This is a familiar goal for Starbucks, which has oscillated back and forth over the years between a “third place” coffeeshop that encourages guests to stay a while, and a tech-forward, mobile order-first operation with a revolving door of customers in a hurry. In reality, most Starbucks cafes will have to be a mix of both with clearly delineated areas for different customer needs.
- Telling the Starbucks brand story that includes the “unmatched coffee expertise,” community role, and “special experience only Starbucks can provide.”
- NRN take: Niccol’s reference to “not letting others define who we are” appears to be an explicit nod to Starbucks’ recent foray into trend-following instead of leading. The ultimate goal will be to pry the Starbucks brand from the growing pack of coffee alternatives, including brands like Dutch Bros and 7 Brew, both of which focus on speed and efficiency rather than in-café experiences.
Niccol also said that beyond these four main bullet points, he will also be focusing on Starbucks’ international markets, most notably China which has been struggling as of late, and the Middle East “where we’ll work to dispel misconceptions about our brand” regarding boycotts surrounding the Israel and Palestine conflict.
“My focus for the first 100 days is clear: I’ll spend time in our stores and at our support centers, meeting with key partners and suppliers, and working with our team to drive these critical first steps,” Niccol ended his letter. “Together, we will get back to what makes Starbucks, Starbucks.”
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