Time for Change: Businesses Adapting Operations in light of COVID-19

The COVID-19 pandemic has fundamentally changed consumers’ experiences, attitudes and behaviors regarding their every day purchases. As a result of these changes, businesses are facing pressure to adjust their operations to meet the existing needs of their customers. With the implementation of physical distancing rules, customers are becoming increasingly reliant on e-commerce platforms and curbside pick-up services to access their everyday necessities. Given the increased reliance on these retail models and the uncertain duration of COVID-19’s effects, businesses have the opportunity to capture new marketplace opportunities and digital customer segments by pivoting their operations towards digital commerce.

This opportunity is one that Starbucks has been pursuing, even prior to the onset of the COVID-19 pandemic. As part of its push towards digital integration, Starbucks is shifting away from its traditional sit-down café operations and towards a mobile ordering and pickup-only store concept. Starbucks plans to close 400 of its cafe-style shops in the USA and Canada in the coming year, while focusing on its new operational format of increased drive-thru and walk-up locations. Even before COVID-19 shifted the retail landscape, Starbucks found that about 80% of its USA transactions were for “on-the-go” orders. In light of this, and the increased customer reliance on alternative pickup methods during COVID-19, Starbucks is in a good position to successfully transition towards a more digital operational structure.

The economic ramifications of the COVID-19 pandemic has called for innovative operational changes for traditional walk-in businesses. By reducing the amount of sit-in stores and restructuring its delivery of goods, Starbucks will cater more to its customer’s convenience, which is key in the current circumstances. Starbucks serves as one example of businesses adapting their operational structures which will likely increase in the coming months if the COVID-19 social distancing measures remain in force.

Author: Andre Damata, 2020 Summer Student-at-law