Starbucks is making some big changes.
The company will modernize its stores, reported CNN (Mar. 20). Starting this summer in New York City, stores will be focused on "convenience, comfort and connection." Through the upcoming changes, the coffee giant is trying to retain a home-grown feel, despite the fact that it just opened its 30,000th store in China and is continuing to grow.
"Every store, every community, has its own personality," said CEO Kevin Johnson.
Part of the modernization will be thinking about each store's "portfolio" in the neighborhood that it serves. For example, in an area with 20 stores, Starbucks will think about how many should have drive-thrus and how many should be set up for mobile ordering, according to Johnson.
Additionally, rolling out different formats may help prevent one location from taking clients from another Starbucks location nearby. The segmentation could help the company fix its congestion problem, said Morningstar analyst R.J Hottovy.
Stores will be designed for speed and comfort. Some might be cashless and others may have more space and seating for customers to settle in. Though convenience is increasingly important to today's consumers, Johnson said Starbucks still wants its locations to be places where customers can have relationships with their baristas and feel comfortable hanging out.
The company studied stores in several of its key markets — Texas, New York and New Jersey — last summer. In Texas, customers said they wanted to feel good in stores, according to COO Roz Brewer. So the company is making those brighter, fresher and cleaner, he said. In New Jersey, customers wanted different things at different times of day. So, the company streamlined stores for a speedy checkout and added large areas for people to use later in the day. In New York City, pickup stores along with separate cafes made sense.
Additionally, Starbucks is testing out a compostable cup in five cities: New York, San Francisco, Seattle, Vancouver and London, reported CNN (Mar. 21). The new cup looks like the current paper cup on the outside, but the difference is on the inside. Instead of a plastic liner, a biodegradable liner serves as a barrier to make sure liquid does not leak out.
The liner, which was developed by a Thailand-based company, makes the cup compostable in commercial composting facilities — which is rare.
"We want to play a leading role in helping around the sustainability of the planet. And that means serving our coffee in sustainable packaging," Johnson told CNN. "We think there's a better solution."
Additionally, the company shared that it will roll out recyclable, strawless lids to all stores in the U.S. and Canada over the next year. The lids are made with 9% less plastic than the current lid and straws.
"We have a lot of work to do on understanding these cup technologies, how they scale how they work in the cup manufacturing environment, and then of course how they flow through the waste management infrastructures," said Rebecca Zimmer, Starbuck's global director of environment.
The Starbucks Rewards loyalty program is getting an update as well. Starting April 16, all Starbucks Rewards members earn stars toward free rewards from the day they join. A new tiered rewards structure will replace the current single option at participating Starbucks locations, offering customers more ways to use their stars toward free items.
The updated program will eliminate the two tiers of Starbucks Rewards: green and gold levels. In the current system, only gold members, who earned 300 points to ascend to that tier, were able to redeem their stars for free food or drink, reported CNBC (Mar. 19). The company hopes to get new members more engaged with the program through the changes.
Members will be able to cash in 25 stars for an extra espresso shot, dairy substitute or another flavor pump. For 50, they will get coffee or tea or a bakery item, etc. The greater range of options is meant to appeal to a wider spectrum of customers, from those who prefer to spend rewards points quickly to those who store them up.
Additionally, stars earned by Starbucks Rewards Visa credit and prepaid members will no longer expire.
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Victoria writes for the weekly Food Institute Report and the daily news update, Today in Food. Victoria graduated from Montclair State University with a B.A in Journalism and has a background in Nutrition and Food Science. She can be reached through her email at Victoria.email@example.com.
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