Starbucks is spending $1 billion on comfy armchairs, plants and hardcover books to spruce up its coffee shops – betting that’s enough to lure back lonely customers fed-up with the digital age.
More than 1,000 renovations have been completed over the past nine months, the Financial Times reported. Thousands more are on the way, as CEO Brian Niccol hopes to turn as many as 9,000 cafés into an oasis for “lonely and disconnected” people, according to the article.
In a Thursday morning letter, Niccol – who took the helm two years ago and has been leading the “Back to Starbucks” turnaround effort – cheered the program’s success so far.
“Starbucks is back,” Niccol wrote, saying coffee cup doodles, condiment bars, ceramic mugs, free refills and retrofitted stores have made locations “feel like Starbucks again.”
Rugs, ceramics, houseplants, colorful wall paint, curtains and mirrors have been added to stores to give them a more home-y feel. It’s not known which books Starbucks has bought.
There are settee chairs equipped with electrical outlets, inviting customers to charge their laptops and stay a while – and maybe even buy a second drink while they’re at it.
In his note, Niccol tapped into Starbucks’ commitment to create a warm “third place” – a spot where customers can stop and linger between work and home.
As rival coffee chains like Dutch Bros, 7 Brew and Luckin Coffee have focused on convenience and price, Starbucks is taking the opposite approach with an emphasis on customer experience.
Its “Green Apron Service” program previously returned baristas to writing personalized messages and doodles on coffee cups, with Starbucks buying 200,000 Sharpies for the purpose, and streamlined the drink-making process behind the bar.
Starbucks has also been adding a bevy of new drink and food options to its menu, recording its largest-ever fall menu launch in the US and Canada this year.
The turnaround appears to be starting to take hold, as Starbucks saw same-store sales rise 7.9% in the third quarter – driven by strong sales in the US, its largest market.
“In an age when an unprecedented amount of life takes place online, and a record number of people report feeling lonely and disconnected, Starbucks has doubled down on human connection and customer service,” Starbucks said in a blog post last month.
Like many other chains in the food and beverage industry, Starbucks was forced to halt sit-down service during the pandemic.
In the following years, it slowly came back, but the chain focused on online order options that got customers in and out the door fast. Customers also complained that the pick-up process was chaotic, with some waiting 40 minutes for a simple order.
“The world is coming back to this, being in a place and meeting with humans, not being distant,” Dawn Clark, senior vice president of coffee house design, told the Financial Times.
The remodeling plan isn’t hitting margins, either. The company has identified $2 billion in cost savings. It is spending about $150,000 per store – about 10 times less than what the company paid in prior renovations, according to Clark.
Store “uplifts” are being completed at night, so stores don’t have to close during the day and lose out on sales, and they are driving customer traffic “at a fraction of the cost of earlier remodels,” according to Niccol.