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Key Takeaways
- Starbucks CEO Brian Niccol said he could imagine a day where the company’s app is able to handle spoken order requests.
- The cafe chain is primarily using technology behind the scenes, while focusing on making stores social and inviting places to spend time, he said last week.
Getting your morning caffeine fix may soon be as simple as grumbling into your phone about your need for coffee.
AI could some day allow the Starbucks (SBUX) app to handle voice orders and do a better job of remembering customers’ preferences, CEO Brian Niccol said recently. He said the cafe chain was eager to use artificial intelligence to “remove friction” in how customers interact with the coffee-and-beverage giant.
“You could just literally talk into your phone, like: ‘Hey, I need my Starbucks order. I’ll be there in 10 minutes,’ and everything just seamlessly goes through the app,” Niccol said on a Yahoo! Finance podcast recorded at a technology conference. “You show up at Starbucks, and your drink is ready.”
Starbucks (SBUX) is mostly experimenting with AI and other new technologies behind the scenes as it tries to cultivate a warm, social vibe in cafes, Niccol said. The business is about a year into a turnaround effort, an attempt to jumpstart sluggish sales without offering widespread promotions. The Back to Starbucks campaign aims to serve customers at the counter within four minutes—and oit revitalize a stock that’s down about 7% this year.
What This News Means for Investors
Starbucks’ approach illustrates how hospitality businesses may be wary of using AI in customer-facing roles at present. Restaurants, such as Chipotle, that have touted their embrace of novel technology have generally focused on making back-of-house operations more efficient.
Order boards are an exception to keeping technology in the back of the house. The screens give customers an idea of where their order is in the system and when it will be ready, Niccol said.
Starbucks recently announced dozens of store closures for locations that aren’t well-suited to its vision. The company is renovating other locations by adding rugs and drapes, Niccol said, and it’s considering plants. Starbucks wants drive-thru and grab-and-go customers thinking that next time, they should “grab a seat,” Niccol said.
Teens are an obvious target audience for the company, Niccol said. They already like Starbucks drinks and could use a space to engage in more old-fashioned socializing, Niccol said.
“Maybe I’m being a naive parent here a little bit, but I hope they put their phone down and connect with each other,” he said on the podcast. “We’re going to provide them that space.”
