Supply Chain News

Starbucks Delivery: ‘E-Commerce on Steroids’ or 1999 All Over Again?

Starbucks chief Howard Schultz calls his plan to deliver coffee and food to customers who order via mobile phones “e-commerce on steroids.” This direct-to-your-door delivery plan may sound like 1999 all over again, but consider how much has changed.

For Starbucks addicts who simply can’t wait in line for their tall skinny lattes, what chief executive officer Howard Schultz announced on an earnings call sounds like a dream.

“Imagine the ability to create a standing order of Starbucks delivered hot to your desk daily,” he told investors. “That’s our version of e-commerce on steroids.”

Starting in the second half of next year, customers in some markets will be able to use the retailer’s mobile ordering and payment app.

Between this and all the Uber-like delivery services cropping up (“Uber for alcohol” Saucey, ” Uber for marijuana” among them), it’s starting to remind us of the last dot-com bust when near-instant gratification seemed too good to be true, and soon no longer was true. Remember grocery delivery service Webvan, one-hour delivery service Kozmo.com and Pets.com, all of which failed spectacularly?

Howard Schultz

“Imagine the ability to create a standing order of Starbucks delivered hot to your desk daily, that’s our version of e-commerce on steroids.”Howard Schultz, Chairman and CEO, Starbucks

But there is something different this time for Starbucks, and other delivery service startups and that is huge leaps in technology, including the ability to collect and harness big data, mobile apps, and GPS phone tracking, which makes it easier to connect customers with the closest courier.

Consider companies like Deliv, which provides same-day delivery service from retailers at local malls by using crowd sourced couriers.

“We’ve all been accustomed to the faster that something is delivered the more expensive it is, but what if the fastest way to get something delivered is actually the cheapest?” founder and chief executive officer Daphne Carmeli suggested to me in an interview.

Instacart, a grocery delivery service out of San Francisco, also uses crowdsourced delivery and relies on the same type of technology to make improvements.

And there’s a recent Inc piece that pointed to startups like Eaze, a San Francisco- medicinal marijuana delivery service that takes roughly 10 minutes. Its founder and CEO Keith McCarty thinks they can do better: “We want to get our operations almost automated and the only way to really do that is through technology,” he says. His team is tracking behavior among patients to determine how often they make purchases so that they can receive refill reminders, and eventually automatic refills.

Sounds like he’s on the same page as Schultz, who sees the app as a way to build customer loyalty and an acknowledgement of the trend to choose online ease over brick-and-mortar lines. Automatic refills, indeed.

Source: Upstart Business Journal

Related: Behind the Scenes at Starbucks Supply Chain Operations it’s Plan, Source, Make & Deliver


Article Topics
News   Supply Chain   Leadership   Starbucks   All topics


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