Starbucks’ high-tech hometown of Seattle has had a lasting impression on the coffee giant that’s visible at locations around the world. The company has always been quick to innovate and embrace technology tools, like its Mobile Order & Pay program that lets customers order with their smartphone and skip the line.
The gamble on tech has paid off, with more than 8 million mobile paying customers, more than a third of which use the mobile order-ahead feature. The only problem? Keeping up with demand, says CEO Howard Schultz.
“The good news is, the technology has been embraced,” he said in an interview with Bloomberg News on Starbucks’ new expansion into Italy. “I don’t want to say the bad news but the challenge has been, it’s been so wildly successful that, in many stores, it’s created congestion in the morning that we are in the process of fixing.”
Schultz and his fellow Starbucks executives talked about the congestion caused by mobile order-ahead on the company’s most recent earnings call. The significant uptick in usage is causing in-store congestion issues for mobile order-ahead customers trying to pick up their coffee and food at hand-off stations. This problem not only affects customers who are picking up items, but also potential customers who may notice the in-store traffic and end up not purchasing anything.
The solution, Schultz told Bloomberg, will be new stations in stores dedicated to mobile order ahead customers, distinct from existing in-store registers.
During the interview, he also touted the success of a new “social gifting” program that just rolled out in China. Using the app, Starbucks customers can send cash for coffee to friends. That program will be expanding internationally, according to Schultz.
He also teased “new surprises” in Starbucks’ technology programs that will be announced at the company’s annual meeting March 22.
“Every brick-and-mortar retailer today must recognize that we must be as relevant on peoples’ smartphone and mobile devices as we are in our stores,” said Schultz. “We’ve done that as well, or better, than any other company in the world.”
Schultz will be stepping down as CEO of Starbucks corporate in April, staying on as chairman and focusing on developing the Starbucks Reserve Roasteries into an upscale international coffee brand. The move has lead to some speculation that the smooth-tongued businessman will get into politics.
Watch the full interview below to hear Schultz address the political rumors, Starbucks’ culture, and the company’s expansion into the Italian market.