Is Starbucks’ mobile app the company’s greatest weakness?
Former CEO Howard Schultz has said as much, per a recent podcast appearance. And it’s something new CEO Brian Niccol will likely tackle first when he takes the helm at the coffee chain next month, CNBC reported Sunday (Aug. 18).
According to that report, both investors and executives have blamed operational troubles for the company’s lagging sales, with Schultz telling the Acquired podcast earlier this summer that the mobile app is a problem, calling it “the biggest Achilles heel for Starbucks.”
CNBC notes that mobile orders make up about a third of the company’s sales, and are typically more complicated. Add-ons such as foam and syrups help generate profit, but they also take up baristas’ time, leading to frustration on both sides of the counter.
“I agree with Howard Schultz,” Robert Byrne, senior director of consumer research for Technomic, a restaurant market research firm, told CNBC. “This is not in the data — this is in the store. This is where the issue lies.”
In late April, outgoing CEO Laxman Narasimhan said the company was having trouble meeting demand in the morning — and driving off customers with long wait times. And Schultz, during his Acquired appearance, said he experienced the problem firsthand at a Starbucks in Chicago.
“Everyone shows up, and all of a sudden we got a mosh pit, and that’s not Starbucks,” he said.
Starbucks announced the appointment of Niccol last week. He joins Starbucks after six years as CEO of Chipotle, and on the heels of a mixed earnings report for the coffee giant, which saw global comparable store sales dip 3%. This was driven by a 5% decrease in transactions in spite of a 2% increase in average ticket size.
“We are operating in a challenging consumer environment. You see the impact of that in away-from-home consumption,” Narasimhan said on an earnings call.
PYMNTS wrote last week that industry analysts were positive in their assessment of Starbucks’ hiring of Niccol, who also served as CEO of Taco Bell from 2015 to 2018.
“It’s surprising, but he may just be the perfect fit for the organization,” said Greg Zakowicz, senior eCommerce expert at Omnisend. “He has an impressive background, especially in the food industry where products are nonessential items, and has successfully led companies like this during challenging economic times.
“With a continual increase of consumers trading down on items like groceries, I don’t think this should be understated,” he added. “He knows how to appeal to consumers at times when their wallets are tight. That is one thing Starbucks desperately needs.”
We get a lot of press releases here at PYMNTS. We consider all of them, and some are more newsworthy than others. But this one really got our attention. This past week, Diebold Nixdorf made headlines with its announcement of successfully installing two new automated teller machines (ATMs) at the U.S. National Science Foundation’s McMurdo Station in Antarctica. This achievement marks a significant milestone in banking accessibility, to be sure. We would like to meet the crew that installed them. We’d also like to know why they needed two. Was there a line at the first one? More to come on that.
According to Diebold, McMurdo Station is Antarctica’s largest research and logistics hub, supporting a fluctuating population that ranges from fewer than 200 residents during the winter months to up to 1,100 individuals during the summer (October through February). The presence of these ATMs is crucial, it says, as the next closest banking facilities are thousands of miles away, making them the only ATMs on the entire continent. How’s that for a value proposition?
The DN Series ATMs are designed for always-on availability. And why do they need two? One ATM is actively in use, while the second serves as a backup for spare parts, ensuring uninterrupted service in this isolated area. These machines are connected to the DN AllConnect Data Engine, which leverages Internet of Things (IoT) connectivity, machine learning, and artificial intelligence (AI) to monitor their performance. A dedicated team continuously aggregates and analyzes technical data to identify potential issues, enabling remote diagnostics and repairs. The ATM can be maintained by trained staff at NSF McMurdo Station, or the Diebold Nixdorf service team can remotely guide them through the repair process.
Anyway, it got us thinking. Are there other surprising ATMs in extreme locations? Well, of course, there are. Here’s a sampling of what we found.
At an altitude of about 5,364 meters (17,600 feet), the Mount Everest Base Camp in Nepal is another unexpected place to find an ATM. Although it’s not a permanent fixture and is often set up seasonally, it caters to climbers and trekkers who need cash for local transactions. This temporary ATM service underscores the adaptability of banking services in extreme environments.
In some parts of the Amazon rainforest, particularly in Brazil and Peru, ATMs can be found in small villages and towns. These machines are vital for local communities, providing access to cash in areas where digital payment options might be limited. The presence of ATMs here demonstrates how banking services can reach even the most remote communities.
Located in the Tibet Autonomous Region, Nagqu is home to one of the highest ATMs in the world. This region is very remote, with limited infrastructure, making the presence of an ATM a notable example of banking accessibility in extreme environments.
In the Thousand Islands (Kepulauan Seribu) off the coast of Jakarta, Indonesia, there’s a floating ATM. This unique ATM serves the local community and tourists on the islands, demonstrating how banking services can adapt to isolated marine environments.
Longyearbyen, the administrative center of the Svalbard archipelago in Norway, boasts the most northerly ATM. This location is one of the most remote inhabited places on Earth, with limited access to mainland Norway, making the ATM a vital service for residents and visitors.
On a more serious note, the installation of ATMs in places like Antarctica and other remote locations highlights the evolving nature of banking technology. With advancements in IoT, AI and remote diagnostics, it’s becoming increasingly feasible to provide banking services in areas previously considered inaccessible. As we look to the future, it will be interesting to see where else ATMs might appear. Whether it’s on a remote island, at the top of a mountain or even in space, the ability to access cash is becoming more universal than ever. And who knows? Maybe one day, we’ll see an ATM on Mars, serving the first interplanetary travelers.
For now, the presence of ATMs in unexpected places reminds us that banking is not just about transactions; it’s about connecting people and communities across the globe, no matter how remote they might be.
