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More About Lines

Aug 13, 2010 • Businesses, Thinking Economically • 132 Views    3 Comments

Next time you are in Starbucks, check how long you stood in line. They care. To save 14 seconds, for example, Starbucks designed a larger ice scoop which baristas could use for one dip instead of 2. Still though, in a “mystery shopper” survey of “limited service restaurant brands,” Starbucks was #6 in wait time, behind Dunkin’ Donuts (4 minutes 3 seconds) during 2008. Also concerned about line time, the NYC Columbus Circle Whole Foods uses a line manager, a single line system, and an unusually high number of check-out registers.

The science of line movement is called queue management. One researcher says that we respond favorably to a wait time of up to 3 minutes. Then, though it starts to feel longer than the actual time. Also, our response can depend on what we are waiting for. People might not want to wait at a gas station but will accept long lines for new iPhones and concert tickets.

The Economic Lesson

Firms that compete in a market with many consumers and many firms are in a monopolistically competitive market. The characteristics of monopolistic competition include many sellers with a similar product, sellers creating an individual, unique identity, and sellers having some control over price. With Starbucks and Dunkin Donuts in a monopolistically competitive market, they can use their coffee, their product assortment, their image, and their wait time to compete.

 

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  • akaiser

    I agree with Paige; as a consumer of Starbucks, I can say that while it looks like wait for coffee takes forever, it is actually the opposite. Starbucks knows that the majority of their consumers have places to be, so all the workers have a specific task to carry out to make the “waiting process” much shorter.

  • Emily Hilton

    Living in a town with many coffee shops in a concentrated area, I know that small details make all the difference when determining where to buy coffee. While Dunkin Donuts separates itself with a large selection of donuts, Starbucks largely sells its image. Because of this, Starbucks can afford to move more slowly. However, I think wait difference does matter while trying to win new customers over. People who patronize Dunkin Donuts but decide to try out Starbucks will survey it with a more critical eye and notice a slower-moving line, and since they are not waiting for anything considerably big or special, they will not be willing to waste the extra time.

  • Paige Shepperly

    Being a consumer of Starbucks and Dunkin Donuts, I can definitely say the line is a huge issue. People plan their lives around waiting in line. In the morning they are not going to want to wait for their coffee when they are in a rush to get to work or they will not want to wait for gas when they need to get somewhere. It seems life has become all about how fast can things get done. The way to survive in any business these days is to keep up with the ever developing technology. Starbucks has put a new application on the iphone where you pay with your phone. This method has only taken off in California but it certainly is cutting edge and keeping up with the times. Today companies have to promote on thousands of different mediums such as television, radio, the internet and the millions of different websites and social networking, newspapers, magazines, and billboards. Competition has taken over every aspect of life, you cannot go anywhere without being accosted by advertisements and promotions. It is information and we are a 24/7 information consuming society.

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