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Starbucks Puts the Focus Back on Customers

By Daniel B. Kline - Nov 6, 2018 at 5:33AM

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The chain has been working to automate some tasks to allow baristas more time to interact.

The relationship between in-store personnel (the baristas who make your coffee) and customers has always been an important part of the Starbucks (SBUX 1.19%) experience. Baristas greet customers, get to know regulars, and shepherd less experienced visitors through ordering.

Delivering on some of these priorities has challenged the coffee chain's personnel as operational tasks have become more complicated. That's something management has pledged to aggressively address, and significant progress was made during the fourth quarter.

"We've taken steps to simplify work in our stores by automating inventory tracking and replenishment, which is enabling us to redirect more store partner time toward serving our customers," said CEO Kevin Johnson during Starbucks' Q4 earnings call. "Business simplification is creating value through a more focused and more efficient operation."

A Starbucks barista pours a drink.

Starbucks wants its baristas to spend more time interacting with customers. Image source: Starbucks.

What is Starbucks doing?

In the third quarter, Starbucks executives detailed a plan to eliminate up to half of current in-store administrative tasks by the end of fiscal year 2019. The chain hopes to "unlock up to two to three hours daily for partners to focus on customer connections," said COO Rosalind Brewer during the fourth-quarter call.

"We made solid progress against this goal in Q4 redeploying up to 1.5 hours per day of non-customer-facing tasks to customer-facing activity depending on the store," she said.

These efforts are a work in progress, and they have not been rolled out nationally. Brewer, however, shared some of what has been selectively implemented.

"We initiated automated inventory in 32 stores for all food products," she stated. "We assigned a team to address dense urban market performance. New York Metro is the initial target. And lastly, we rolled out training to build leadership to facilitate creating best moments in our cafes, and we're starting to see this work pay off."

Brewer noted that "customer connections scores, which include ratings on cleanliness and speed of service" improved in Q4, with September coming in at an all-time high. She believes these efforts are on the right track and will "continue to pivot the momentum in the stores to grow transactions with all our customers, including the infrequent customer."

Putting customers first

Starbucks has a complicated menu even for semi-frequent visitors. In many cases, it also has menu boards that show only a fraction of the choices available.

A new customer -- or one jumping from a basic order to something more complicated -- often needs help from a barista. You may not know if you want a Salted Sweet Cream Cold Foam Cold Brew or even know what cold foam is, and a good barista can walk you through the choices and whip up the order while making you feel comfortable.

Freeing up time for baristas should lead to customers who order more and come back more often. A happy, comfortable patron who feels welcome is much more likely to return. The customer will also be more susceptible to trying new things or taking suggestions from staff members with whom he or she has built up a personal connection.

Starbucks has top-tier technology that allows experienced customers to opt out of human interaction if they choose to do so. The new operational changes will facilitate interaction for those who want or need more customer service. That should drive satisfaction and sales for the chain going forward.

Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Starbucks. The Motley Fool has a disclosure policy.

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