Starbucks and Amazon open first joint concept store with more to come
Starbucks and Amazon.com have teamed up to open the first of at least three concept stores between the two Seattle-based retailing giants. The location at 59th Street between Park and Lexington Avenues in New York City combines Starbucks’ Pickup concept with a cashierless Amazon Go convenience store.
The store is designed with Starbucks branding in mind, incorporating the chain’s traditional green blended with wood furnishings and stone countertops. The Pickup concept emphasizes the convenience of placing and paying for orders ahead using the Starbucks app. A digital screen in the store displays the status of customers’ orders, which they can pick up from a barista when complete. Walk-in customers are also welcome and have the option of ordering at the counter to take out or consume on-premises at a counter, booth or table.
Accessing the Amazon Go area of the store will require customers to call up an “in-store code” on the Amazon app. As customers pull desired sandwiches and other items off store shelves, the app places them in a virtual cart and then submits the charges upon exiting the area.
“The new Starbucks Pickup with Amazon Go is designed to provide our customers with an experience that delivers convenience and connection in an effortless way,” said Katie Young, senior vice president of global growth and development at Starbucks, in a statement. “Our goal with this new store concept is to give our customers the ability to choose which experience is right for them as they go through their day, whether it is utilizing the Starbucks and Amazon apps to purchase food and beverages on the go, or deciding to stay in the lounge for the traditional third place experience Starbucks is known for.”
“Customers have enjoyed the effortless shopping experience enabled by our Just Walk Out technology at Amazon Go where they can simply come in, grab something delicious to eat or drink, and just leave and carry on with their day without having to wait in line to pay,” said Dilip Kumar, vice president of physical retail and technology at Amazon. “We’re excited to now share Amazon Go’s Just Walk Out Shopping experience and curated assortment of fresh-prepared food items and beverages with even more customers at this Starbucks Pickup location in New York City, and can’t wait to hear how customers like it.”
DISCUSSION QUESTIONS: Will the new Starbucks Pickup with Amazon Go concept be a winner for both companies leading to a wide rollout across the U.S.? Do you see opportunities for similar combinations between other parties that could rival the Starbucks and Amazon collaboration?
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30 Comments on "Starbucks and Amazon open first joint concept store with more to come"
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Founder, CEO & Author, HeadCount Corporation
Not many retailers can pull off Amazon Go technology at scale – Starbucks can. This is a powerful combination that will be exciting to see evolve. I do believe this has the potential to roll out. Any retailer where quick service and speed of service/transacting is critical to the experience could benefit from this technology. But as always, cost of implementation and ongoing maintenance are key considerations. This technology is still out of reach for most retailers at scale due to the cost, but it’s getting cheaper and better every day.
Managing Director, GlobalData
There is scope for this to be rolled out further, especially as the wait times in conventional Starbucks can be frustrating. However that does not mean more traditional Starbucks stores will disappear as many people don’t want to order ahead of time or have to use the app to access a store. I see room for both models and perhaps a hybrid which addresses both audiences.
President, Spieckerman Retail
The wait time point is interesting, Neil, and could benefit Amazon. Just as in-store pharmacy orders somehow always require 20-minute browsing — I mean wait — times, any holdups at the Starbucks counter could result in impulse buys on the Amazon side of the store.
Marketing Strategy Lead - Retail, Travel & Distribution, Verizon
I agree with Neil and Carol, the lines at Starbucks are frustrating. Starbucks has been more successful than most brands in driving adoption of mobile ordering and payment and this concept will capitalize on the loyal mobile Starbucks customers that value convenience. This seems like a smart concept and it will be interesting to watch it play out.
Director, Retail Strategy, CI&T
I don’t see how this is any different than current Amazon Go stores and many Starbucks locations – just they’re under the same roof. While these two brands have very similar positioning and make sense together, I would have liked to see a uniquely different experience for either brand in this partnered scenario. When brands partner, they need to provide a uniquely new and differentiated experience from what they currently offer. This doesn’t seem to do that.
Co-Founder & CEO, TakuLabs Ltd.
As a regular user of the Starbucks mobile app to avoid lines, there’s only upside with this collaboration. Probably a more symbiotic relationship too given the similar target demographics yet different value props.
Chief Strategy Officer, Hoobil8
Partnerships are a great way for companies to improve profit margins by sharing space, staff, tech and – most importantly – customers. I see this as a big benefit for Amazon in being able to learn from the master how to create effective in-store experiences, and to pull in that more affluent Starbucks customer. And Starbucks also benefits from Amazon’s help in defraying operating costs, and giving their customers an expanded array of food and beverage products beyond their own very limited menu options. With the product mix and smaller footprint, this concept could be very effective for a national rollout.
Retail Industry Strategy, Esri
I really think this has the potential to be huge. These are powerful and complimentary brands who together can disrupt the convenience store segment with an upscale experience. In urban markets I think this will be really popular as long as the store keeps to the brand, something Starbucks has more experience with than Amazon honestly.
President, Spieckerman Retail
What’s not to like! Two non-competitors that enjoy global brand recognition hooking up to boost separate yet synergistic categories in a convenient, digital-forward brick and mortar format. This isn’t either companys’ first rodeo in the retail partnership arena, yet this co-branded hookup really resonates.
President, b2b Solutions, LLC
The Starbucks Pickup and Amazon Go format will have its greatest success in urban markets where walk-in traffic is high. I expect some of the extent of its success will depend on whether employees return to their city center offices.
President, founder and CEO Interactive Edge
The location is just a few blocks from our office so I can’t wait to check it out and report back, but I’m guessing this will be a huge success for Amazon and Starbucks. Think of it, even if they roll this out to just a small percentage of Starbucks locations, it should be a very quick win.
President, Global Collaborations, Inc.
Those who want to be sure that their coffee is still hot may not want to order it ahead. However this approach may shorten the line at Starbucks and bring more people into the store. It may be difficult to do in existing stores because there is not enough space for the Amazon Go part. This sounds like a successful concept for both companies.
Independent Board Member, Investor and Startup Advisor
The new Starbucks Pickup with Amazon Go concept adds flexibility and convenience to each idea while leveraging their combined branding power. Amazon’s Just Walk Out technology exploits consumers’ desire for ever-higher levels of convenience in the highly trusted and trafficked Starbucks. For Starbucks, the company enhances the customer experience by creating more reasons to visit and enjoy on their terms. As competition increases in retailing, I expect additional cross-brand collaboration and new store configurations that begin to develop retail’s next in-store revolution.
B2B Content Strategist
These Seattle superstars really understand what we want: ease, convenience and quality.
Tech like mobile pay seamlessly blends into the customer experience, making it more efficient and pleasant. I imagine many consumers will make this partnership part of their daily habits.
As for comparable collaborations, I’m stumped about who else could fuse inventiveness into upscale in-store experiences to boost loyalty.
Founding Partner, Merchandising Metrics
I’ve always attributed part of Starbucks’ success to location. They were in the right place at the right time when I needed a cup of coffee and a place to sit with Wi-Fi. Over time I became irritated with long lines and expensive coffee but, hey, they were still in the right place at the right time. Starbucks and Amazon will be able to scale this concept better than most. Starbucks will continue to own thousands of the right locations, and there is no doubt that many loyal customers will salute this new level of speed and convenience. I’ll be curious to see if this development will be enough to draw new customers a couple of block out of their way, whether it be on foot in the city or by car as they are driving around.
Vice President, Research at IDC
The pickup app for Starbucks will be fantastic – as can be seen by Dunkin’ and other pickup apps for coffee. In order for the Amazon component to work it needs to be an integrated experience, not a separate app function as is suggested by the Amazon Go experience. I’m wondering how Starbucks will be sharing data across customer sets. Lastly, will customers be comfortable with the Amazon Go experience in-store? These are all questions that will be answered by these concept stores. The flaw in this plan is the idea of pushing customers to use multiple apps or, even if linked, having customers use these apps more than once when engaging in the store. I just got my coffee and now I have to fumble through an app to grab a danish? Potential is there, but it’s not clear how seamless it will be for the user – and that’s what matters most.
VP, Professional Services, Retail, NCR
Two big iconic brands partnering together to deliver more value and utility to every day shoppers. This has tremendous upside for both companies and will apply pressure for other retailers to find new and interesting partnerships to differentiate themselves. We may be at the start of a big ripple effect taking place.
Chairman Emeritus, Relex Solutions
If I want to buy something from Amazon Go and something from Starbucks I have to go on two apps and order the items I want. So what is the advantage for the customer of the joint location? I can’t even pick up my Amazon order!
Editor-in-Chief/Associate Publisher, RetailWire
You could, however, order your Starbucks drink in advance and then go pick up what you need at Amazon Go in the meantime. Your Starbucks order should be done when you leave Amazon Go. Not the ultimate convenience but convenient nonetheless.
Retail Transformation Thought Leader, Advisor, & Strategist
This is a marriage made in heaven for busy consumers on the go! Starbucks is no stranger to teaming with other retailers, and this combination with Amazon Go creates the ultimate convenience-based experience for consumers and eliminates any friction in the payment process by marrying Starbucks’ mobile app payment with Amazon’s Just Walk Out technology. The only area of improvement I could see is that consumers require two apps to enjoy this experience, so how about a future integration into a single app experience?
I expect we will see many of these locations pop up in numerous cities. Now let’s see what competitors to Just Walk Out technology can do and partner with other cafes!
In specific locations this could be a great concept. There are already city stores which specialize not in convenience goods, but sandwiches and more.
To me, though, the Amazon technology is only a minimal part of this. The idea of a city Starbucks with quick-to-grab sandwiches takes what already exists at Starbucks and brings it to a fuller reality. But — Amazon who?
Director, Retail Market Insights, Aptos
Less waiting, more convenience — as a consumer, what’s not to like? Can they make the investment profitable? Stay tuned.
I love this collaboration – it makes sense. I love the digital screen idea. Currently I have no idea where my order is in the queue when I walk into the store to pick up my order.
Founder, CEO, Black Monk Consulting
It’s hard to see a downside for at least rolling out this format out in select locations. Combining with supermarkets is apparently already working for Starbucks and there is an obvious upside for Amazon. Other combinations could work, but I think a more intriguing idea is a combination Starbucks/Amazon Go/Amazon pickup location, similar to what Amazon set up with 7-Eleven in Tokyo.
CPG/Retail enthusiast, blogger and a couch potato warrior
I am sure there are a lot of customers (like me) who like to order the “the usual” every day. For them, the ability to walk in the store, pick up their usual, and just walk out – seems like a gift from heaven. Perhaps Starbucks could partner with with Amazon to launch a just drive-out tech as well that QSRs can use.
Founder & Principal, PINE
I am stunned but not surprised. Nearly everyone is applauding the brilliant combination of these two companies and of what consumers will gain with the collaboration. Does no one see the downside: of the further dehumanization/diminishing of staff in these situations?
It’s always about purchases going more smoothly—and faster. And of them, the customers, not having to “bother.” Just grab and go! Meanwhile, the need for convenience and efficacy in these transactions increases workers working less as persons—and more as machines. So, why not just make this about machines? Won’t that make this idea even speedier—and cheaper?!
True, there may be exceptions, of some visitors wanting to tarry with their drinks. At the counter. Exchanging words with a barista. But only as long as that worker is not being pulled back to the coffee conveyor belt. And we all know they will be.
Yes, this is good, transactionally. But definitely not, professionally. Or, for the souls of the workers.
Chief Amazement Officer, Shepard Presentations, LLC
What happens when you combine two iconic brands to deliver one amazing experience? This could be it!
Retail Tech Marketing Strategist | B2B Expert Storytelling™ Guru | President, VSN Media LLC
Two separate transactions conducted in the same space is not my definition of ultimate convenience. But the Starbucks-Amazon mashup has intriguing potential.
Starbucks has offered a rather limited food menu for very practical reasons, so the proximity of grab-and-go meals and snacks can be a plus for customers. Amazon Go is re-defining the convenience store concept, but so far I don’t think it has offered bespoke hot beverages.
Success will be a function of behavioral engineering, which comes down to time-saving convenience. If coffee drinkers who stand around for 2-5 minutes waiting for their cups find it attractive to step into the merchandise aisle to nab a bite to eat from an attractive assortment, the concept might fly.
Assuming response to this test is positive, the next step comes down to Starbucks’s ability to re-fit thousands of existing locations with Amazon Go areas and keep those properly stocked during all day-parts. I imagine the sales-per-square-foot will be significantly higher than the in-store seating areas.
Retail Industry Thought Leader
Given you can already pre-order from Starbucks and pickup in stores, this new format is not much of a surprise for regular Starbucks customers. However, the pick up and go could be nice. Sometimes.
This format definitely delivers on experience but value add is uncertain. Especially in a city where there is already a store or shop every 50 feet.