Starbucks CEO is removing Gen Z’s favorite mobile-only pickup store.
Starbucks CEO Brian Nicole concludes with explicitly targeted convenience Gen Z’s preference for “friction-free” experiences: Only their mobiles.”Select it“Store. This move shows an intentional shift from the fast, high-tech-driven model that defined most of the chain’s recent expansion. The Coffee Giant will convert or close around 80-90 of these mobile order-only locations nationwide by the end of 2026. latté.
Announcing the closure, Nicole was directly on the rationale for Starbucks’ Tuesday call with analysts. “We found this format to be overtraded and lacked the warmth and human connection that defines a brand,” he said.
Built primarily in urban centres, airports and hospitals, these stores are designed to maximize convenience, including cash registration, limit or zero seating, and an efficient grab-and-go experience organized through the Starbucks app.. Starbucks wants to take home a hot coffee shop.
This move takes place during Starbucks’ challenges and transition periods. Sales have declined in stores that have been open for at least a year Six quartersNorth American sales have recently dropped by 2%. Analysts point to customer fatigue due to impersonal, tech-centric transactions and “soulless” atmosphere, especially as competitors offer new forms of hospitality and engagement.. Also, as Starbucks reveals in revenue, it’s a difficult needle to deal with that it has become an important part of the business, as 31% of all transactions are mobile.
According to NICCOL, the company remains committed to enhancing its digital and mobile experiences through technical upgrades to the Starbucks app and its rewards program.. However, other actions at Starbucks suggest that these experiences should not be feel cell phone.
Nicole, who took over as CEO in September 2024, bets on a turnaround strategy by restoring the brand’s emotional resonance, reflecting former CEO Howard Schultz’s perception that consumers need “.The third space“It wasn’t home or work. Nicole argued that customer and value perceptions were near two years’ highs and driven by Z and millennials’ profits.
Raise the green apron
Starbucks has a program “Rise” Coffee HouseThis includes investing $150,000 per store to upgrade seating, lighting and atmosphere to a more standard location. The new prototype store of the chain, piloted in New York City, introduces cozy chairs, power outlets and large tables to promote a more collaborative and prolonged environment. Niccol said some mobile-only stores have been converted to this new setup, making sense.
“We plan to complete the assessment of our North American portfolio by the end of this fiscal year to ensure that we have the right coffee houses in the right place to promote profitability and provide a Starbucks experience,” Nicole said in a revenue call..
Starbucks is also piloting small-shaped stores with limited seats to blend convenience and a sense of place.. Starbucks is doubling its legacy as the company prepares for the sunset of its transaction pickup model. Not only is it an efficiency engine, but it is a coffee shop as a community anchor. The “app-only” Starbucks era is over as they bet that its future is not only about convenience, but also about it.
These investments are part of Nicole’s $500 million “Green Apron Services” initiative, which aims to bring “hospitality” back to the heart of the business. It includes an improved barista dress code featuring a green apron, but also highlights personalized services. Starbucks believes this is what Gen Z really wants, not a frictionless mobile order that barely involves human interaction. There is other evidence that Gen Z longs for more human connections; 91% reporting Harris’ polls They want more balance between remote and office work.
Starbucks COO Microphone Gram I spoke CNBC Earlier this week, we provided ideas about how the company views Gen Z. He agreed with the company’s approach to describing it as “hospitality,” and when asked about the evolution of “social cues,” he explained how Starbucks works to lean towards a more subjective experience. “Connections are different to different people,” he said, claiming that Starbucks baristas are well set up “to understand what each customer wants at the moment.” In other words, Starbucks is putting a conflict with “.”Gen Z Stare“That’s because we work to make sure that human connections are at the forefront and center of that business.
When contacted for comment, Starbucks referenced luck Nicole’s comments on the revenue report and analyst calls.
For this story, luck Generated AI was used to assist with initial drafts. The editors checked the accuracy of the information prior to publication.