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Starbucks (NASDAQ: SBUX) It will give its customers exactly what they want when the company reopens its stores. Coffee? Yes. But also social distancing. The cafeteria giant said in its earnings report this week that it is focusing on driving, sidewalk delivery and other techniques that will ensure the safety of customers and employees.
That could be the decision to fuel the recovery at Starbucks, whose revenue fell 5% to $ 6 billion for its fiscal second quarter (which ended March 29). Sales fell as Starbucks temporarily closed stores worldwide, including its second-largest market, China, and its largest market, the US. USA Most Starbucks stores have reopened in China, and the company expects to reopen 90% of the company-operated stores in the US. USA begining of June.
Image source: Starbucks.
Monitor and adapt
But those reopened stores won’t be exactly like the pre-coronavirus Starbucks. The company calls its strategy “monitor and adapt.” Using digital tools, you will assess the coronavirus situation and tailor your services to what best suits local customers. Some of the options Starbucks offers include car delivery, sidewalk delivery if parking is available, and even home delivery.
Starbucks is already working to expand its delivery and delivery services and is also launching an inbound transfer option. Stores will begin the reopening process next week. But only about 30 will allow customers to order inside, and won’t offer seats.
These efforts may be exactly what will bring customers back. COVID-19, the disease caused by the new coronavirus, remains a threat, as global cases number more than 3 million. Even as the crisis begins to ease, consumers are unlikely to forget the severity of the outbreak and may hesitate to enter a crowded cafe.
Some of us may remember the early days of Starbucks and the experience of meeting friends in one of the stores. This new Starbucks experience seems very different. But it actually fits into Starbucks’ American business today, even before the coronavirus crisis. Starbucks said more than 80% of its pre-crisis transactions were on the move, and most of those orders were transferred or placed on the Starbucks app. Almost 60% of the stores operated by the company include direct access.
Order on the go
So if we think about the usual habits of Starbucks customers (ordering on the go) and the additional concern about contact with others during the current health crisis, the effort to increase contactless services seems to be the way. ideal to reopen stores.
Now we might ask ourselves: Will this be temporary or will delivery, delivery and pickup become the new face of Starbucks? Starbucks has not commented on that, but only emphasized the importance of monitoring and adapting the business as necessary.
For an investor, this is great news. It means Starbucks is proactive and ready to change to meet customer needs. Growth in the Starbucks Rewards loyalty program shows that the company is already in a strong position despite falling revenue for the quarter. In the second quarter, active members of EE. USA In the loyalty program they reached 19.4 million with an increase of 15% year over year.
Starbucks may still have difficult days ahead because the coronavirus crisis is not over. But the coffee chain’s emphasis on social distancing will be a significant element that will drive long-term recovery.
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