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Starbucks was a pioneer of the mobile-first shop. Now its getting rid of them

Starbucks is sunsetting its mobile-order and pick-up-only store format as part of a strategy to elevate its café experience.

Starbucks was a pioneer of the mobile-first shop. Now its getting rid of them
[Source photo: Gabby Jones/Bloomberg/Getty Images]

More than five years after launching a mobile-order and pick-up-only store format, Starbucks is abandoning the concept—and it signals a larger strategy for the coffee chain.

Starbucks, which announced its sixth consecutive quarter of falling same-store sales on its earnings call Tuesday, opened its first mobile-only location in Manhattan’s Penn Plaza in 2019. The store concept centered on a speedy, transactional experience that required consumers to place orders and make payments in advance on their phones. These locations did not have any seating to encourage latte drinkers to stick around.

In retrospect, the concept foreshadowed an era of mobile-first, quick-service restaurant designs in response to changing consumer habits due to the pandemic and the following economic inflation, and that’s often meant a de-emphasis on dining rooms. Chipotle’s digital-only restaurant and Chick-fil-A’s all-mobile pickup restaurant are two such examples.

The idea behind the Starbucks mobile-only stores was well timed to the rise of contactless, takeout, and delivery fast-food options, but as Starbucks seeks to chart a comeback, the model no longer fits its strategy as it emphasizes its café experience.

“We found this format to be overly transactional and lacking the warmth and human connection that defines our brand,” Starbucks CEO Brian Niccol said on the earnings call.

Between 80 and 90 of these locations will close by next year, while some may be converted to traditional coffeehouses with seating. That doesn’t mean Starbucks is moving away from mobile ordering, which accounts for 31% of transactions. However, where the coffeehouse chain has a physical presence, it wants to offer a setting in which guests can feel welcome. Niccol said a forthcoming prototype of a new small-footprint café will have a drive-through, room for 32 seats, and about 30% lower building costs.

As Starbucks has brought back details like handwritten notes on coffee cups and an updated barista dress code, and it plans future store uplifts, a mobile-only storefront isn’t the brand experience the company is after anymore. It’s not just about the coffee; it’s about the coffee shop.

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