Coffee retailers are tapping into digital technology that helps them grow their reach beyond their stores, especially in China, where competition has been brewing between Chinese coffee chain Luckin Coffee and Starbucks.
Luckin Coffee, for its part, recently announced that it is entering the automated retail market with the rollout of a luckin popMINI smart vending machine and the luckin coffee EXPRESS smart unmanned coffee machine.
“Luckin Coffee’s unmanned retail network, store footprint and eCommerce channels together form our proprietary omnichannel customer traffic network,” Luckin Coffee CEO Jenny Zhiya Qian said in the announcement. “With our value propositions of high quality, high affordability and high convenience, Luckin is rapidly becoming a well-recognized, on-trend, and mass market fast-moving consumer goods (FMCG) brand.”
Luckin coffee EXPRESS offers “freshly brewed drinks with the same quality and taste as in Luckin stores,” per the announcement. And the “biggest attraction” of luckin popMINI is what the firm refers to as “eCcommerce Prices in Vending Machines.” The coffee chain lets customers enjoy the benefits of “low prices” that it said are “comparable to eCommerce” as well as the convenience that vending machines provide as it has significant economies of scale and works closely with worldwide suppliers.
The unmanned terminals will cover locations such as airports, highway service stations and office buildings, among others, and will add to the company’s store network that is already in place. For its part, Luckin has 4,507 self-operated stores as of the close of last year. The company said it believes the store count makes it China’s biggest coffee chain by “number of stores” in the country. Luckin opened 593 new stores in the second quarter of last year and had 2,963 in total, which was approaching Starbucks’ 3,600 locations in the country as of an August report.
Luckin is hardly the only retailer tapping into the potential of vending machines. According to the PYMNTS Automated Retail Tracker, “Kiosks are increasingly popular sales channels and are being leveraged to facilitate everything from real estate purchases to bill payments. The solutions enable retailers to provide products and promotions without tying up staff or taking up much floorspace and have been shown to increase customer spend.” And, beyond kiosks, coffee retailers, such as Bandit, are driving innovation with a mobile order only café concept.
From Bandit to Luckin Coffee, beverage retailers are harnessing the latest innovations to make it easier for consumers to get their java without the need to place their orders at the counter.
In Other Brick-And-Mortar News
Little Caesars Enterprises Inc. will team with DoorDash Inc. to supply pizza delivery services from 3,600 restaurants in the United States and Canada. Little Caesars had never offered delivery until now and is said to be the third-largest pizza chain in the world. The quick-service chain will not restrict discounts to carry-out orders and will not require customers to make minimum purchases to receive deals.
The full menu will be available for delivery, and selections will be priced the same for delivery as well as takeout. Orders will come in via the website and mobile app of Little Caesars, and they will be sent to the DoorDash driver fleet for fulfillment via the DoorDash Drive service. Detroit, Michigan-based Little Caesars has stores in all 50 U.S. states and 24 countries.
In other news, Macy’s plans to shutter 28 of its namesake department stores as well as one Bloomingdale’s store as part of its yearly review process. The retailer operates approximately 680 department stores in addition to 190 specialty shops. It has been seeking to win back shoppers who are turning more to online shopping and visiting shopping malls less frequently.
The retailer has been working to bolster its product offerings, revamp its store designs and pilot experimental store formats. The retailer’s stock had risen as high as 7 percent on Wednesday (Jan. 8) in premarket trading after a report that holiday sales numbers were greater than forecasted. Those gains were reduced as the market opened on news of the store closings.
And a strong economy in the U.S. and healthy consumer spending weren’t sufficient to bolster holiday sales at many department stores and mall-based chains. JCPenney, Kohl’s and L Brands (Victoria’s Secret’s parent company) noted lower sales in November and December.
Walmart and Target have seen increasing sales and store traffic for much of the past year while they put effort toward online ordering services and in-store pickup. Off-price chains, such as TJX Cos., have also logged healthy sales.
To keep tabs on the latest retail trends, check next week’s Retail Pulse.