Mobile Commerce

Starbucks Puts A Toe Into Delivery Business

Starbucks will begin testing coffee delivery in Seattle and New York City later this year with two very different pilot programs, the coffee company announced at its annual shareholder meeting on Wednesday (March 18).

In Seattle, deliveries will be made by same-day delivery platform Postmates. In New York, Starbucks stores located in large buildings will offer delivery within the building by Starbucks employees, starting with the Empire State Building. In both cases, customers will be able to order drinks and pastries through the mobile ordering feature that went live on Tuesday in the Starbucks iPhone app, The Seattle Times reported.

Delivery through the new services will cost a fixed fee, the company said. Postmates currently makes Starbucks coffee deliveries without the company’s cooperation, with delivery fees that depend on distance but typically start at $5 plus 9 percent of the retail price of the food item being delivered.

But taking orders through the Starbucks app could dramatically increase the volume of deliveries for Postmates, which uses part-time workers with their own bikes and cars for the on-demand service. Postmates deliveries usually peak at mealtimes, which will make managing capacity a particular challenge for the San Francisco-based startup.

However, Postmates CEO Bastian Lehmann said about 1,000 people have already signed up to delivery for Postmates in Seattle. Despite the city’s perpetual traffic problems, the fact that Seattle has such a high density of Starbucks locations means there will be very short distances between the store and the customer, Lehmann said.

Along with the fixed-fee pricing, Starbucks and Postmates are also working out both logistical and packaging details. “We’re actually working with Starbucks on trying to figure out what the best delivery containers are,” Lehmann told Re/code. “Is there a packaging that we can develop together? Is there a cup that’s a better to-go cup?”

For the New York test, which will launch first in the Empire State Building, Starbucks won’t use an outside delivery service. Instead, what it’s calling a “Green Apron barista delivery option” will use Starbucks employees and deliver only within the building itself. The stores will have separate areas dedicated to preparing the orders for delivery so the new service won’t slow down other store operations, said Starbucks Chief Digital Officer Adam Brotman.

Brotman added that Starbucks will extend mobile ordering to Canada and begin testing it in the U.K. before the end of the 2015.

——————————–

Latest Insights: 

Facebook is a giant in the ad game, with 2.3 billion active monthly users and $16.6 billion in quarterly advertising revenue. However, its omnipresence makes it a honeypot for fraudsters. In this month’s Digital Fraud Report, PYMNTS talks with Rob Leathern, Facebook’s director of product management, on how the site deploys automated systems and thorough advertiser vetting to close the lid on fraudster attempts.

Click to comment

TRENDING RIGHT NOW

To Top