Starbucks: Can digital convenience preserve the coffeehouse experience?

This teaching case examines how Starbucks sought to redesign its store operations as digital ordering, artificial intelligence (AI), and algorithmic technologies became increasingly embedded in its business. Mobile ordering enhanced customer convenience but also intensified operational pressures as digitally generated demand interacted with store capacity, extensive customization, staffing constraints, and the coffeehouse experience. The case places students in the position of Brian Niccol, Starbucks’ Chairman and Chief Executive Officer, in late September 2025. Niccol initiated the Back to Starbucks turnaround, including menu simplification, increased staffing, store improvements, and renewed emphasis on customer experience. At the same time, Starbucks was deploying technologies such as Smart Queue, Green Dot Assist, automated inventory counting, and a next-generation point-of-sale system. The unresolved decision concerned the operating logic that should guide the next phase of Starbucks’ digital transformation. Students evaluate four strategic paths: digital-first standardization, capacity-synchronized digital operations, a format-differentiated network, and a partner-augmented technology model. The case enables students to examine how technology redistributes operational roles, the choices between automation and human augmentation, and the implications of algorithmic coordination for frontline discretion and control. Students ultimately design and justify a technology-enabled operating model that addresses trade-offs among scalability, operational performance, employee discretion, customer convenience, and Starbucks’ coffeehouse experience.