Can Drive Up With Starbucks Fuel Growth for Target’s Curbside Program?

Target is expanding its Drive Up with Starbucks program nationwide, with plans to let curbside pickup customers add Starbucks menu items to their orders at the more than 1,700 stores with both a Starbucks Cafe and Drive Up service. The rollout, which is expected to be complete by October, will add a potentially powerful differentiator to Target’s omnichannel service.

The process of adding a Starbucks item to a Drive Up order is designed to be as simple and seamless as possible to encourage last-minute value adds. Shoppers are already asked to let Target know when they are on their way to pick up their order, and they will now be prompted to place a food or beverage order from inside the app. The Starbucks and Target orders are delivered to the car simultaneously after the customer arrives at the store.

Target first began testing Drive Up with Starbucks in early 2022 in response to customer requests. The retailer continually developed the process to ensure it was both efficient for associates and enjoyable for shoppers, and it plans to continue fine-tuning operations into the future.

Target’s Drive Up program has been a major component of the retailer’s omnichannel strategy since its launch in 2017, and its importance only grew when cross-channel journeys became standard practice during the pandemic. Target added fresh and frozen foods to the items available for pickup in 2020, and adult beverages became available in 2021.

The expansion of curbside pickup is a natural fit for Target, which fulfilled more than 95% of its total sales from stores in 2021 through its stores-as-hubs strategy. This has enabled more than 10% of the retailer’s total sales to come from same-day fulfillment in 2023.

Convenience adds like Returns with Drive Up and Drive Up with Starbucks are a natural complement to the brand’s growing omnichannel focus. Target opened its first in-store Starbucks location in 1999, and the number of beverages purchased through these stores topped 170 million in 2022 alone.

Curbside pickup peaked when social distancing became the norm during the pandemic, experiencing 49% growth during that year alone, according to data from Insider Intelligence. However, growth has since plateaued as shoppers come to prefer in-store pickup, which is expected to become the preferred BOPIS (buy online, pick up in-store) method for 66.4% of shoppers by 2026. This has resulted in retailers like Costco testing the service on a limited basis but not yet offering it nationwide and Kohl’s focusing on in-store pickup instead.

What might set Target apart are its unique value propositions, like Drive Up with Starbucks, as well as its grocery offerings.

A November 2022 survey by PYMNTS found that 41% of consumers who order groceries online collected them through curbside pickup in the previous month, up from 35% in late 2021. While curbside pickup may be fading overall as it evolves from a modern differentiator into mildly convenient table stakes, Target’s investments may help Drive Up remain a sales driver well into the future.