We spent most of the week in Dallas for the FSTEC conference, an event focused on the intersection of restaurants and technology. It's owned by Informa, the parent company of Restaurant Business.
The event featured plenty of discussion on the potential technology has for the industry, which is vast. Much of the focus was on artificial intelligence, and its potential to change everything from labor scheduling to franchise management to order-taking in the drive-thru.
Much of the desire on the part of restaurants is to get something out of technology like this. They want to move customers through faster, or run restaurants with fewer employees.
But at the same time, many executives insisted, they didn’t want to lose what makes them special: Hospitality. This is a people business, as Joe Park, chief digital and technology officer, told me at the event.
Indeed, as the industry continues its push into more of a tech-forward institution, it is worth noting the goings-on at a certain coffee shop giant in Seattle.
Starbucks is, perhaps, the most tech-forward restaurant chain in the U.S. The company gets nearly 60% of its sales through members of its loyalty program. It has been able to get that percentage without resorting to the sorts of discounts we see on many fast-food chain loyalty apps right now.
That loyalty program, and the company’s ultra-popular mobile app, help it move coffee-loving customers through on busy mornings even if it doesn’t have a drive-thru.
Yet it has also created immense backups during those busy times. Mobile ordering is great on the surface. But there is no line on the mobile order app that could discourage customers from coming in, so stores in particularly busy areas can be inundated with orders at the same time.
And these orders are increasingly complex, as Starbucks has tens of thousands of potential drink combinations thanks to decades of beverage development that increased its ingredient count.
The difficult interaction of mobile orders with traditional in-store orders have taken away from the hospitality on which the brand was built, stressing baristas. In short: Starbucks’ drive to get customers in and out of the door has damaged its foundational tenet as a “third place” between work and home.
None of this is new, of course. The brand has been wringing its hands of this conflict for the past two and a half years. It prompted Howard Schultz to come out of retirement to lead a fix-it effort. And since Starbucks’ sales cratered late last year, it prompted the board to erase a corresponding effort over that period to find a replacement CEO and train them in the company’s culture.
In the meantime, there have been roughly 5 million think pieces, a couple of which appeared on this website, about this complexity.
Brian Niccol, the first outside hire from another restaurant chain to become the CEO of Starbucks, did not mince words in his early plan for revitalizing the brand.
“It can feel transactional,” he wrote. “Menus can feel overwhelming, product is inconsistent, the wait too long or the handoff too hectic. These moments are opportunities for us to do better.”
Bob Fish, the co-CEO of Biggby Coffee, once told me on my podcast that a coffee chain can only generate so much revenue by focusing purely on the third place element of the business. They depend on the customer coming in for their coffee on their way to work or school or wherever else they’re going.
But that transactional element of the business cannot take away from what makes a brand great. If your brand was built on service and hospitality, a mobile app might be great. But that service and hospitality must remain.
Starbucks under Niccol is refocusing—again—on that hospitality element of the business. “We’re getting back to Starbucks,” he said.
Technology is great. And restaurants do need ways to ease the labor constraints on their business. But that technology should supplement the people in the restaurants, making life easier for them. Perhaps then that will make the business a more desirable place to work, which will make life easier for operators.