Announcing the closures, Niccol was direct about the rationale on Starbucks’ Tuesday call with analysts. “We found this format to be overly transactional and lacking the warmth and human connection that defines our brand,” he said.

Built primarily in urban centers, airports, and hospitals, these stores were designed to maximize convenience—no cash registers, limited or zero seating, and an efficient grab-and-go experience orchestrated through the Starbucks app. Starbucks wants to bring back the warm coffeehouse.

The move comes amid a period of challenge and transition for Starbucks. Sales at stores that have been open for at least one year have declined for six straight quarters, with North American sales have dropped by 2% most recently. Analysts point to customer fatigue with impersonal, tech-centric transactions and “soulless” atmospheres, especially as competitors offer new forms of hospitality and engagement. It’s also a tricky needle to thread, as Starbucks disclosed in its earnings that 31% of all transactions are mobile, making it a critical part of the business.

The company remains committed, according to Niccol, to enhancing digital and mobile experiences through technical upgrades to the Starbucks app and its Rewards program, set for rollout in 2026. But Starbucks’ other actions are suggesting that these experiences shouldn’t feel mobile.

Niccol, who took over as CEO in September 2024, has staked his turnaround strategy on restoring the brand’s emotional resonance, echoing former CEO Howard Schultz’s recognition that consumers needed a “third space” that wasn’t home or work. Niccol argued on the call that customer-value perceptions are near two-year highs, and they’re driven by gains among Gen Z and millennials, who make up over half of Starbucks’ customer base. It shows that younger consumers wanted more warmth than previously thought.

Uplift through green aprons

Starbucks has a program under way to “uplift” its coffee houses, which involves investing $150,000 per store to upgrade seating, lighting, and atmosphere in more standard locations. The chain’s new prototype stores—already being piloted in New York City—reintroduce cozy chairs, power outlets, and large tables, fostering a more communal and linger-friendly environment. Niccol said some mobile-only stores will get converted to this new setup, where it makes sense.

“We plan to complete an evaluation of our North American portfolio by the end of this fiscal year to ensure we have the right coffee houses in the right locations to drive profitability and deliver the Starbucks experience,” Niccol said on the earnings call.

Starbucks is also piloting smaller-format stores with limited seating to blend convenience with a sense of place—another sign the brand isn’t abandoning quick service, but is instead recalibrating its approach. As the company prepares to sunset its transactional pickup model, Starbucks is doubling down on its legacy: coffee shops as community anchors, not just efficiency engines. The era of the “app-only” Starbucks is ending, as the company bets that its future lies in connection, not just convenience.

These investments are part of Niccol’s $500 million “Green Apron Service” initiative, intended to restore “hospitality” to the center of its business. It involves a revamped barista dress code featuring, yes, the green apron, but also emphasizes personalized service. Starbucks believes this is what Gen Z really wants, not a frictionless mobile order that barely involves interacting with a human. There is other evidence that Gen Z craves more human connection, with 91% telling the Harris Poll they want more of a balance between remote and office work.

Starbucks COO Mike Grams spoke with CNBC earlier this week and also offered thoughts on how the company views Gen Z. He argued in favor of an approach the company describes as “hospitality” and, when asked about evolving “social cues,” he described how Starbucks is working to lean into a more subjective experience. “Connection is different things to different people,” he said, arguing that Starbucks baristas are well positioned “to understand what each individual customer wants in that moment in time.” In other words, Starbucks is risking a collision with the “Gen Z stare,” because it’s working to make sure that the human connection is front and center in its business.

When reached for comment, Starbucks referred Fortune to the earnings report and Niccol’s comments on the analyst call.

For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.