Starbucks, Amazon Go Collaboration Combines Convenience and Connection
Talk about the best of both worlds. The new Starbucks Pickup with Amazon Go, in New York City opened today. The store is a combination of a Starbucks Pickup and Amazon Go, utilizing the order-ahead feature in the Starbucks app and Amazon Go’s Just Walk Out technology to create an easy checkout experience.
For guests looking to chill out and work, the location features individual workspaces and expanded tables with power outlets and USB ports. Located at at 59th Street between Park & Lexington Avenues, the new store offers the full Starbucks menu and a curated assortment of food and beverages in the Amazon Go market, including fresh-prepared salads, sandwiches, bakery items, and snack options. It's the first of three locations planned. Two additional stores will open in 2022, with the second location planned for The New York Times Building located at 40th Street & 8th Avenue in NYC. The third location has not been disclosed.
Convenience and Connection
“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. “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.”
Starbucks' new hybrid concept comes as guests are more and more in charge of their own experience.
An Innovative Experience
“Amazon Go and Starbucks share a common vision to provide innovative in-store experiences that are centered on the customer,” said Dilip Kumar, vice president of physical retail and technology at Amazon. “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.”
Digital Orders
Starbucks Pickup stores primarily accept orders that are placed through the Starbucks app prior to the customer arriving at the store. Once the customer arrives at the location, they can find the status of their order on a digital screen in the store and then pick up their order directly from a Starbucks barista.
44% of diners surveyed cite the ability to track order status is very important when selecting a restaurant, according to HT's 2021 Customer Engagement Technology Study.
To enter the Amazon Go market and store’s lounge seating, customers can use the “In-Store Code” in the Amazon Shopping app, Amazon One or a credit card, and then shop the Amazon Go market like any other Amazon Go store. Once inside, anything customers take off the shelf is automatically added to their virtual cart. Anything they put back on the shelf comes out of their virtual cart. When a customer is done shopping, they can either sit in the lounge area to enjoy their Starbucks beverage and food item selected from the Amazon Go market or be on their way. After the customer leaves the Amazon Go market, their card will be charged and they can access their receipt within a few hours, sometimes faster.
Evolving CX
Starbucks and Amazon Go plan to open at least three Starbucks Pickup with Amazon Go stores, with a second location planned for The New York Times Building located at 40th Street & 8th Avenue in New York City next year.
This new store concept aligns with Starbucks trade area transformation strategy, which builds on the strength of Starbucks digital customer relationships and the Starbucks app to meet evolving customer preferences for convenience, higher levels of mobile ordering and contactless pay, and reduced time waiting in lines. In fact, 38% of diners cite the ability to pay for food via their mobile device as very important when selecting a restaurant, according to HT's 2021 Customer Engagement Technology Study. The convenient digital experience is complemented by a welcoming, modernized third place environment as customers continue to reconnect in person and choose which experience is right for them as they go through their day.
Multiple Retail Concepts
Starbucks opened its first NYC location in 1993. Starbucks will continue to create a blend of traditional Starbucks café locations with Starbucks Pickup stores as well as new and relevant store experiences. New York City continues to be a place where Starbucks offers a range of experiences, from the first Starbucks Pickup store to the immersive Starbucks Reserve Roastery New York located in the Meatpacking district.
Outside of NYC, Starbucks continues to expand its drive-thru format as well.
In a Q4 2021 earnings calls with analysts, Kevin Johnson, President and Chief Executive Officer, recapped the brand's performance, including a revenue growing 22%. "We expanded our portfolio of drive-thrus, introduced new store formats to meet our customers where they are and turbocharge growth in our digital customer relationships in the U.S. and China."
INDUSTRY REACTIONS
Michael Jaszczyk, CEO, GK America, shares his insights on what this move means for other retailers and restaurants.
"Starbucks is the latest business utilizing cashierless technology to attract consumers who want to get in and out of the store as quickly as possible. The new store concept, in partnership with Amazon, showcases how those in the hospitality space can cater their offerings towards what consumers really want — a fast and frictionless experience.
"In response to this partnership, other retailers and restaurants will be encouraged to experiment with new tech that will solve today’s payment challenges. Consumers want to be able to order ahead, check in, grab their order and just walk out or pay on their phone. Scan-less checkout provides a great experience with fewer customer tasks, all while offering flexibility in how they pay. The technology should also remove any friction and still allow businesses to interact with consumers, whether by sending real-time relevant offers or rewarding loyal customers in the mobile app.
"All in all, it’s important that retailers and restaurants evaluate which payment technology fits within their retail format and unique shoppers’ needs. Whether it’s mobile scanning, camera sensors or palm scanning, digital options are here to stay and businesses must continue to reimagine the way consumers order and pay.”
This story has been corrected. Two locations will open in 2022; one will be in NYC and the additional location has not yet been disclosed.
All photos are courtesy of Starbucks.