A one percent increase in sales, and five percent in gains is certainly not enough for a company like Starbucks (NASDAQ:SBUX). So Howard Schultz came up with a new plan: to start delivering coffee at your home or office! Starbucks CEO, Howard Schultz noted that the decrease in traffic is because of less people going to malls and more people shopping online, so the best way to reach them is to bring coffee at their doorsteps.
Starbucks will launch its delivery service in the coming year and will also introduce a new app for order and payment by mid 2015. Matt Ryan, the chief global strategy officer at Starbucks, said that the company has not yet decided a full delivery plan yet but it is working on it and will unveil it soon. Mr. Ryan did not clarify that if Starbucks would deliver coffee itself or will use a third party source. But this idea doesn’t seem to impress many businessmen on the RetailWire Brain Trust.
Tony Orlando, owner of Tony O’s Supermarket, asked a question about how Starbucks is going to make profit on this, unless it adds a $10 charge for delivery or increases its prices. Bob Phibbs, CEO of The Retail Doctor, also had similar views; he doesn’t believe that this could be profitable. Cathy Hotka, principal at Cathy Hotka and associates, said that they don’t see how this would generate value for Starbucks? Would the whipped cream become cold on their lattes? Also what about delivery? There are a lot of questions.
While many didn’t like the idea, others gave suggestions on how to make this a success, If any office group forms and you could have your coffee directly at office without stopping to get it? That would have to be excellent! However the challenge would be to maintain its quality, said Bill Bittner, principal at BWH Consulting. Steve Montgomery, president of b2b Solutions, said that the only way the delivery can be successful is if a lot of people order coffee frequently and on a frequent delivery route or else it would be absurd to just transport only a cup of coffee to any office located some 20 floors on top of the ground.
Some people were really hopeful to see this as a success, David Biernbaum, senior marketing and business development consultant at David Biernbaum and Associates, said that if Starbucks would be able to pull it off and to deliver hot coffee devoid of any compromises in superiority; this would pretty successful, just like pizza delivery! For many of us Starbucks is not your everyday coffee, it is just like an addiction, so the delivery option is definitely going be great along with excellent results.
Some people like Mr. Lee Peterson, EVP of creative services at WD Partners, got even more carried away and specifically requested Mr. Schultz to start this service in Columbus and that all of the addicts would definitely be really thankful.
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