How are Starbucks benefits? Starbucks CEO Howard officially announces company reinvention plan!

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On September 13th, local time, Starbucks interim CEO Howard Schultz officially announced the Starbucks Reinvention Plan at an investor briefing! He stated that the plan is about reinventing Starbucks, and that it doesn't need to reinvent what needs to be done.

Howard expressed that increasing investment in store operations and employee benefits will boost sales and profits, and will put the company on track for a turnaround in 2024.

Therefore, the secret to reinvention: to provide better customer and barista experiences, the company plans to improve employee benefits, reimagine the third space, innovate product preparation, simplify product preparation time, and expand digital convenience.

Enhancing Employee Benefits and Management Training

Howard stated that Starbucks partners are at the core of the reinvention plan and the company itself. Therefore, they will bring more value to partners through salary and benefits.

There will also be increased investment in recruitment, onboarding training, and store equipment to improve the customer experience. Plans to be implemented during fiscal year 2023 include:

Adjusting the working hours required for partners and integrating other opportunities to increase overall compensation; providing higher sick pay wages, new savings methods, student loan management incentives, and mental health support.

According to surveys, stores with management teams who have been employed for more than three years can increase weekly sales and customer satisfaction by 13%.

Therefore, new leadership training will be provided for store managers, along with redesigned scheduling and decision-making solutions to retain more experienced managers. This will enable managers to focus on core job functions, thereby improving store partner morale and overall performance.

Reimagining the Third Space

Reimagining the third space aims to create a better and more convenient customer experience by enhancing retail and digital services, allowing customers to feel the convenience of Starbucks' third space wherever they are.

Traditionally, the third space has provided customers with a unique Starbucks experience—creating a more relaxed and free environment where they can talk without restraint—but it was limited to physical stores. With the impact of the pandemic, more and more consumers have reduced in-store consumption, and the effectiveness of the third space has not been fully realized.

Therefore, Starbucks has decided to invest more in creating different store models. In addition to large stores that can provide space for guests, there will also be specially designed small-scale takeout stores where customers can place orders for pickup or choose home delivery, as well as drive-thru stores. By strengthening network distribution and diversifying store models, Starbucks can better meet the needs of different customers.

Upgrading Beverage Preparation Systems and Equipment

To improve both customer and barista experiences, Starbucks has developed a new beverage preparation system with redesigned workflow for the cold drink station, which can effectively enhance the convenience of barista beverage preparation and reduce customer waiting times.

To this end, Starbucks is developing new coffee machines and simplifying beverage preparation processes, reducing the time and steps required to make cold drinks, improving productivity, and ultimately creating time for partners to connect with customers.

Cold brew coffee has been deeply loved by consumers since its launch, but each preparation requires soaking for more than ten hours plus cumbersome preparation steps, making it very inefficient.

Therefore, Starbucks is developing a system that uses Cold Pressed Cold Brew technology to extract cold brew coffee liquid. This new technology can low-pressure cold brew coffee liquid in just a few seconds, making it as convenient as extracting espresso.

For drip coffee, Starbucks has also developed a new machine! Unlike previous drip coffee machines that required partners to grind coffee beans in advance and had cumbersome preparation steps, the new machine is similar to an espresso machine but without the pressurized extraction function. Coffee beans will also have a dedicated bean hopper for storage.

With just the press of a button, the coffee machine will automatically complete grinding and brewing within 30 seconds, reducing the gradual loss of aroma and flavor from pre-ground coffee powder over time, ensuring the freshness and high quality of freshly brewed coffee.

Simplifying Beverage and Food Preparation Steps

Starbucks Chief Operating Officer John Culver stated: the increasingly complex and time-consuming preparation of cold drinks (Frappuccinos) combined with surging sales has created bottlenecks in Starbucks stores. Research and testing have found that the new beverage preparation system can reduce Frappuccino preparation time by nearly one-third, and the steps will also be simplified.

For food heating times, new ovens will also be introduced. Stores with high food heating volume/drive-thru stores can apply for ovens that can heat in batches or hot food cabinets that can keep food warm, reducing waiting times for customers who need to get their meals quickly.

Expanding Digital Convenience

The reinvention plan also includes technology that makes the Starbucks customer experience more personalized and effortless, while also freeing up baristas' time to focus on creating more connections.

This includes dedicated mobile order pickup lanes; more personalized drive-thru experiences that can identify Starbucks Rewards customers and provide recommendations based on order history; improved timing algorithms to create more accurate wait times for mobile orders; and easy payment options where customers don't need to take out their credit cards or even the Starbucks app.

In addition to these, Starbucks' reinvention plan also stated that it will accelerate Starbucks' international leadership position, and it is expected that two-thirds of global retail growth in the next three years will come from international business, with the Chinese market being particularly important.

Therefore, Starbucks China released its 2025 China Strategic Vision on September 14th, organizing a development plan for the Chinese market based on the reinvention plan.

Although Howard is the driving force behind this reinvention plan, subsequent execution will require the cooperation of the new CEO, Laxman Narasimhan.

In the next six months, Howard will travel with Laxman across the United States and around the world. During this time, he will continue to lead Starbucks on the board of directors, set the tone for the company's development, and do everything possible to ensure Laxman's success.

Regarding Laxman's capabilities, Howard used the phrase "the perfect person to lead the perfect company at the perfect time" to express his confidence in Laxman.

When discussing how to create value for Starbucks, Laxman stated: we must meet or even exceed employee expectations in order to exceed customer expectations, and only then can we have better products and innovation. We must bring differentiated experiences in both the real world and the digital world, and have a positive impact on the community.

What performance will Starbucks have in the future? Let's wait and see together~

Image source: Starbucks official website

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