Starbucks Says New “Rules-Based” Algorithm Is Already Reducing Wait Times – CoffeeTalk

Starbucks has implemented a new technology pilot at dozens of US locations, which has reduced the average time for making a beverage ordered inside cafes by two minutes. The Seattle-based chain plans to expand the pilot to hundreds more of its 10,000 US locations to recapture lost sales and improve customer sentiment.

Starbucks reported five consecutive quarterly declines in same-store sales, with customers turning to rivals for cheaper and faster coffee. The company’s second-quarter U.S. and global same-store sales fell 2% and 1%, respectively. Adjusted earnings per share came in below analysts’ expectations, while revenue largely met targets. Starbucks said that labor investments to improve store service weighed on its profit, along with costs associated with corporate layoffs earlier this year.

Chairman Brian Niccol has said that Starbucks needs to improve its speed of service, particularly during the morning rush. About half of in-store orders took longer than four minutes, while mobile orders averaged around six minutes to complete. Starbucks is also using the new technology to experiment with scheduling specific pickup times for mobile orders. Baristas are learning to time the making of mobile orders based on factors such as order complexity, aiming to prevent drinks sitting out for minutes before a customer arrives.

The new order-sequencing algorithm is “rules-based,” following a predetermined “if-then” structure, rather than being powered by artificial intelligence. Starbucks is harnessing technology in other areas, including improving staffing levels and implementing a 700-store pilot aimed at putting the right number of workers in cafes based on demand.

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