Starbucks developing new store dedicated to pickup and delivery orders
Customers at Starbucks can order their drinks with a wide variety of ingredients. This attention to detail has helped the coffee giant stand out in a fast-food world. It has also led to long lines in the chain’s stores and at its drive-throughs as customers queue up to receive their orders.
In recent years, Starbucks added online ordering with in-store pickup and home delivery to try to manage its line problem.
Starbucks CFO Patrick Grismer told attendees at the Goldman Sachs Global Retailing Conference this week that mobile order and pay has been a success for the chain, but one that has tested the chain’s capacity to serve its customers.
“I suppose it’s a high-quality growth problem to have in retail where there’s latent demand and the opportunity for us is to unlock the capacity so that we can accommodate all of that demand,” said Mr. Grismer (via Seeking Alpha).
Home delivery, however, has been slower to catch on with Starbucks customers.
“We are now in a handful of markets in the U.S. [We] expect through our partnership with Uber Eats to reach national coverage by the early part of 2020. But I would say that our expectations are that the business would grow over time,” he said.
“We know that convenience is an important need state for customers generally and we’ve found that for Starbucks specifically that convenience is very highly valued. So, we believe that over time a delivered beverage will be more commonplace, if you will, in the U.S and that we would see higher levels of acceptance,” Mr. Grismer added.
One possible solution to Starbucks’ capacity issue may be currently in development at a store in Manhattan. In an interview with Bloomberg, Starbucks CEO Kevin Johnson said the store will only handle pickup and delivery orders.
Inspiration for the New York City location comes from China where the coffee giant operates Starbucks Now locations that serve as express pickup locations for customers placing orders on their mobile devices.
The new store will not be the first time that Starbucks has tinkered with a pickup-only location in the U.S. In 2017. The chain tested a similar concept at its headquarters in Seattle.
- Starbucks is opening a pick-up-only store to make PSL season a breeze – Fast Company
- Will mobile order and pay-only stores improve Starbucks’ operational performance? – RetailWire
- Starbucks Corporation Management Presents at Goldman Sachs 26th Annual Global Retailing Conference (Transcript) – Seeking Alpha
DISCUSSION QUESTIONS: How important a feature will mobile order and in-store pickup become for foodservice operators over the next decade? Do you see a format that only handles pickup and delivery orders as being transformative for Starbucks’ business in the U.S.?