Former Starbucks CEO Howard Schultz advises the company to improve the customer experience and its mobile app. He suggests these steps could reignite customer engagement and foster a loyalty reboot, an important move to confront declining sales in key markets such as North America and China.
Schultz advocates for enhancing in-store customer engagement, arguing that the brand’s future relies less on analytical data and more on real interactions with consumers. The former CEO believes that by shifting the focus from mere transactions to memorable experiences, Starbucks can deepen its understanding of customer preferences, thereby boosting brand loyalty and encouraging long-term growth.
There are concerns about Starbucks transforming into a predominantly drive-thru and delivery service, threatening its ‘third place’ status, a comfortable space away from home and work. Schultz also proposes a comprehensive revamp of the mobile app. This seems crucial because the app accounted for 31% of all US transactions in the last quarter.
Starbucks’ CEO, Laxman Narasimhan, confirmed an issue with the mobile app that has seen customers abandoning orders before completion.
Schultz’s guidance for Starbucks’ customer engagement boost
This issue has contributed to a 3% dip in sales in North America and a more substantial 11% drop in China, Starbucks’ second-largest market.
Starbucks’ quarterly revenues have experienced a 1.8% decline, falling to $8.56 billion due to a decrease in casual customer footfall. Even in China, revenues receded by 8% to $705.8 million. Nonetheless, Schultz stresses the vital role of Starbucks’ personnel, from baristas to board members, encouraging them to be more actively involved in the stores.
Schultz stands firm on the need for a detailed review of Starbucks’ strategies, highlighting the significance of preserving its “elite status.” He remains hopeful about the company’s potential comeback, advocating for improved customer service, in-store enhancements, and an innovative approach to meet market trends. Schultz remains convinced that Starbucks can recapture its leading market position, proving to be a beacon of positivity for the organization.
