Cashierless Tech, Starbucks Deal Put Amazon in QSR Business

The rumors are true: Amazon is making moves into the quick-service restaurant (QSR) space, partnering with Starbucks to bring its “Just Walk Out” frictionless checkout technology into the latter’s stores. The coffeehouse chain announced on Thursday (Nov. 18) that it has launched a new concept in midtown Manhattan in which consumers, after checking into the store by inserting their credit card, scanning a code in Amazon’s app or hovering their palm over the Amazon One device, can grab their items and leave, with their purchases automatically charged to their card or account.

The store will feature premade and packaged food and beverages from local and national brands, a pickup counter for pre-ordered drinks and a seating area. With this store, Starbucks aims to have its cake and eat it, too, when it comes to the tradeoffs between quick convenience and in-person experiences.

“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,” Katie Young, senior vice president of global growth and development at Starbucks, said 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 … 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.”

With this partnership, Amazon is taking advantage of the market opportunity presented by the pressing labor challenges that restaurants are experiencing. By creating a path to purchase that minimizes the role of the human — consumers can order online, pick up their item and leave while baristas continue to focus on preparing the next order — Amazon has presented Starbucks with the opportunity to get more out of their workforce.

Additionally, this cashierless technology may not only be a driver of efficiency for the restaurant, but also a builder of loyalty for its customers. The feature maximizes the main benefit of self-checkout technology for consumers: speed. According to data from PYMNTS’ study “Today’s Self-Service Shopping Journey: The New Retail Expectation,” created in collaboration with Toshiba — which surveyed more than 2,000 U.S. adults about their checkout behaviors — the single most popular reason consumers report for using self-service checkout is that they believe it is faster, and the second most popular reason is that it cuts out the waiting in line.

See also: Consumers Want Self-Service Checkout Options, But Rarely Get to Use Them

“Now more than ever, consumers’ preference for self-service technologies is at the forefront of what feels like all goods and services industries,” Robert Hill, GM of order ahead for Instacart, told PYMNTS in an interview earlier this year. “Businesses need to adapt and offer a range of self-service, online-based and COVID-safe technologies.”

Read more: Instacart’s FoodStorm Taps Self-Service to Bring the Digital Shift Into Stores

Plus, these stores encourage consumers to engage with Starbucks’ app, and by extension its loyalty program, making it easier for the coffeehouse chain to collect data about its consumers’ preferences and behaviors. The full name of the concept is Starbucks Pickup with Amazon Go, and the news release notes that these stores “primarily accept orders that are placed through the Starbucks app prior to the customer arriving at the store.” With this emphasis on mobile ordering, the chain has the ability to drive frequency, maximizing value from it.