By Ilan Brat
Starbucks Corp. shed light on its plans to deliver hot coffee to
its customers, saying it will start testing two new delivery
services in the second half of this year in an effort to make its
stores in dense cities work more like highly productive outlets
with drive-through windows.
One delivery option, to be tested first in the coffee chain's
home city of Seattle, will involve linking Starbucks with San
Francisco-based delivery startup Postmates Inc., which currently
ferries products for clients in dozens of U.S. cities. In a second
initiative, Starbucks employees in certain office
buildings--starting with New York's Empire State Building--will
carry food-and-beverage orders to customers on other floors who
order online, in what the company is calling "Green Apron" delivery
because of the color its baristas wear.
Starbucks won't have a minimum order size but will charge
clients a flat fee for the delivery service, said Adam Brotman,
Starbucks chief digital officer. He said the company hasn't decided
yet what the fee would be.
The delivery plans, which Starbucks first hinted at in October,
are part of broader restaurant-industry efforts to expand delivery
beyond the pizza chains and Chinese-food purveyors who have long
made house calls. Chains see delivery as a way to increase how
often customers order from them, boosting sales. Restaurant Brands
International Inc.'s Burger King brand began testing a delivery
service in 2012 and now delivers in nine U.S. markets, and Panera
Bread Co. recently began testing its first delivery service in
Louisville, Ky., a Panera spokesman said.
Starbucks in the last decade has been adding drive-through
windows to stores near freeways and other locations that are
relatively easy to access by car. Starbucks Chief Financial Officer
Scott Maw said company research shows that though the outlets are
more expensive to build, their sales, profit and total return on
investment are about 30% higher than stores without them.
Some customers may also use the delivery service to order more
frequently from Starbucks than they normally would "because we're
going to give people back time" by eliminating the need for them to
spend time picking up their drinks, Mr. Brotman said.
For Starbucks, the new service could also build loyalty and
yield valuable new information about customers' buying habits. To
access the new delivery services, clients will need to join the
company's rewards program, Mr. Brotman said.
Last year, Starbucks began testing a service that allows
customers to order their beverages and pay for them ahead of time
online in Portland, Ore., and recently rolled it out to 650 stores
in Pacific Northwest.
Separately on Wednesday, Starbucks said it would split its stock
for the first time in a decade. Shareholders will receive an extra
share for each one they own on April 8. Following the split, the
company's sixth since going public in 1992, Starbucks said its
fiscal 2015 profit forecast would be in a range of $1.77 a share to
$1.79 a share.
Write to Ilan Brat at ilan.brat@wsj.com
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