Starbucks expands delivery with Uber Eats partnership
- After completing a pilot program in Miami, Starbucks plans to expand its Starbucks Delivery program into a quarter of its U.S markets next year via a partnership with Uber Eats, Starbucks chief operations officer and group president Rosalind Brewer said during Starbucks Investor Day on Thursday.
- Starbucks also plans to begin a two-year renovation across a third of its portfolio that will allow for stores to integrate more technology and new format changes, such as express door pickups for mobile orders.
- The company will enhance and grow its loyalty rewards and mobile ordering platforms, especially since digital customers tend to purchase two to three times as many products, Brewer said during the presentation. In spring, it plans to roll out an enhanced loyalty rewards program, which grew memberships by 15% during fiscal year 2018, that will allow customers to receive rewards after two to three visits.
With competitors like Dunkin' and McDonald's upping their delivery games, it's no surprise that Starbucks would do the same. The coffee giant's plans to expand its digital and technological platforms are part of its initiatives to better engage with the customers, executives said during its Investor Day.
"We must continue to adapt and adapt rapidly to meet our customers where they are," Starbucks CEO Kevin Johnson told investors.
Delivery isn't an entirely new concept for the coffee chain. Starbucks Delivers is exploding in popularity within its more tech-savvy markets in China, where it also is planning a massive delivery expansion. Delivery makes up a majority of orders in China, executives said.
By adding Uber Eats as its third delivery partner, the company is positioning delivery to be its fourth revenue pillar after in-store, mobile and drive-thru ordering. The Uber Eats partnership also marks the company’s largest roll out of delivery on a single platform — Starbucks delivery is only available in select markets through other third-party delivery services.
The coffee chain has been dabbling in delivery through a partnership with Postmates, which has expanded into 400 markets since 2015. The company also offers delivery via GrubHub.
Starbucks' decision to throw its weight behind delivery could spark similar investments from industry rivals, especially since consumer demand for convenience shows no sign of slowing down.
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