AI NO: Brian Niccol became Starbucks CEO to pursue one major goal: improving the company's profits while driving sales growth. The executive has been trying to turn things around with significant technology upgrades, but AI-based solutions have so far failed to show real gains in terms of efficiency or operational standards.
After a nine-month pilot turned out to be a dud, Starbucks recently decided to retire a new AI-based tool designed to ease its inventory management pains. The coffeehouse chain tried to bring more automation into its stores' beverage inventory, but it was ultimately forced to admit that human workers are still much better at replenishing the shelves.
According to Reuters sources, Starbucks recently sent an internal newsletter announcing that its AI inventory tool, named Automated Counting (AC), was being retired. In its place, coffeehouse staffers will have to count milk and other beverage "components" the same way they count other product types.
The AC app was developed by Seattle-based firm NomadGo, and was tested for years before Niccol took Starbucks' helm. The new executive decided to deploy AC across all Starbucks locations across North America last September, announcing a rapid rollout to make inventory management faster and more efficient.
Automated Counting was designed to automate counts of syrup, milk, and other beverage products, using tablets equipped with cameras and LiDAR sensors to identify the products that needed a refill. Sources said that the app was essentially "hallucinating" actual coffee shop inventories, failing to detect something like a peppermint syrup bottle while counting other bottles that were on the same shelf.
Starbucks confirmed to Reuters that the AC program is no more because the company has now decided to "standardize how inventory is counted across coffeehouses as we continue to focus on consistency and execution at scale."
Alternative solutions to the failed AI tool apparently include more frequent shipments of beverage products to stores, plus some unspecified improvements within Starbucks' own supply chain. The company even shared screenshots with feedback from internal staffers, who welcomed the decision to abandon AI-based automation. Meanwhile, NomadGo said that it will take this useful customer feedback to further improve its app.
Niccol deployed AC with the idea of optimizing Starbucks' inventory with smart technologies and AI, but the coffee chain has tried to embrace several technological innovations over the years. Even before its new CEO arrived, the company tried the NFT avenue, 3D printing, and other high-tech solutions, including dark-pattern tricks to allegedly rake in hundreds of millions of dollars. Though we wouldn't call the latter innovation.