The 10-Second Version (AI Summary)
What happened: Starbucks is spending more than $1 billion to restore seating and comfort it stripped out to speed up mobile pickup.
Why it matters: The company is investing heavily in the idea that customers want a place to stay, and early signs say it's working.
What to do: Look at whether your showroom and service lounge make people want to stay.
AI-generated and reviewed by the ASOTU team.
One of us sat down to watch an Eagles game with his daughters, mostly to feel a little sad. The high point turned out to be a commercial. Out of the corner of his eye, he caught a Starbucks ad, and it made him want coffee. Then one daughter turned to the other and asked, "Does this make you want Starbucks?" The answer was yes.
We shared the story on today's episode of the Automotive State of the Union, because it shows how far Starbucks has come in rebuilding what made it special.
How did Starbucks lose its seats, and how is it getting them back?
Before 2024: Starbucks removed roughly 30,000 comfortable seats and blocked access to outlets to discourage lingering, designing stores around mobile-order pickup.
2024: Brian Niccol becomes CEO and launches his "Back to Starbucks" plan.
Now: Renovations cost about $150,000 per store across more than 8,000 locations, adding upholstered seating, warmer lighting, wood finishes, and plants. More than 25,000 seats are returning to U.S. stores, and more than 1,000 coffeehouses are finished.
By fiscal year-end: At least 1,500 renovated stores.
Next: A smaller-format test with shorter counters and flexible seating, built to fit spaces that used to be too tight.
Ceramic mugs, condiment bars, and handwritten notes on cups are back too.
Starbucks optimized its stores for speed and forgot why people came in the first place.
What can dealers learn from Starbucks' third place?
This is the idea Starbucks originally brought to market: the third place, somewhere between home and work where people want to spend time. We've been saying for two years that retail spaces built to capture people's attention and make them want to stay beat the ones built to get them in and out.
Dealers should still cut friction out of the buying process. The paperwork, the waiting, and the back-and-forth should be as short as possible. The best stores do both. They cut the time a customer has to spend while making the space somewhere they want to spend time.
"[A]t the end of the day, they desire to sit, they desire to stay, whether that be for sales or service."
Walk your showroom and service lounge this week like a first-time customer. Would you want to stay?
The full conversation is on today's episode.
