Former Starbucks CEO Howard Schultz advises the company to enhance the customer experience and improve its mobile app. He suggests that implementing these steps could reignite customer engagement and foster a loyalty reboot, which is crucial to address declining sales in key markets like North America and China.
Schultz emphasizes the importance of improving in-store customer engagement, stating that the brand’s future relies less on data analysis and more on genuine interactions with consumers. He believes that by shifting focus from transactions to creating memorable experiences, Starbucks can better understand customer preferences, thereby increasing brand loyalty and promoting long-term growth.
There are concerns about Starbucks becoming predominantly a drive-thru and delivery service, potentially jeopardizing its “third place” status as a comfortable space away from home and work. Schultz also recommends a comprehensive overhaul of the mobile app since it contributed to 31% of all US transactions in the last quarter.
Starbucks’ current CEO, Laxman Narasimhan, acknowledged an issue with the mobile app leading to customers abandoning orders before completion.
Schultz’s advice for boosting Starbucks’ customer engagement
This problem has resulted in a 3% decrease in sales in North America and a more significant 11% decline in China, Starbucks’ second-largest market.
Starbucks’ quarterly revenues have declined by 1.8%, dropping to $8.56 billion due to a decrease in casual customer foot traffic. Even in China, revenues decreased by 8% to $705.8 million. However, Schultz emphasizes the crucial role of Starbucks’ personnel, from baristas to board members, urging them to be more actively engaged in the store.
Schultz remains steadfast in the need for a thorough review of Starbucks’ strategies, emphasizing the importance of maintaining its “elite status.” He remains optimistic about the company’s potential recovery, advocating for enhanced customer service, in-store improvements, and an innovative approach to meet market demands. Schultz is confident that Starbucks can reclaim its position as a market leader, serving as a beacon of positivity for the organization.
