Technology gets an extra shot in Starbucks licensee locations.
Starbucks (SBUX) – Get Starbucks Corporation Report has been in Target (TGT) – Get Target Corporation Report locations for well over two decades. Since 2003, a Starbucks coffee shop has been put in almost all of the new builds of Target stores, (as long as there was enough room, that is). When an older Target store was remodeled, the popular coffee shop was usually worked into the remodel.
The ease of being able to add essentially a coffee kiosk or mini coffee shop to many retailers like that of Target, Kroger (KR) – Get Kroger Company (The) Report, or Hy-Vee among many others, has been a great asset to both the host company and Starbucks. The mini locations are licensed to run by the retailers and pay a royalty or percentage back to Starbucks for use of its business space.
Since the locations are run by the retailers, the coffee shops experiences have not been consistent per Chief Marketing Officer Brady Brewer of Starbucks. Changes are in the works to make the customer experience on par with that of the franchise and corporate locations across the U.S.
Drink Coffee, Get Rewarded
Regular Starbucks customers have enjoyed the Starbucks loyalty program since its launch in 2008. Originally called Starbucks Card Rewards before becoming My Starbucks Rewards in 2009, it allows customers to earn Starbucks Stars (the chain’s version of points) towards free drinks, add-ons, and food items. Reward customers can receive free refills on brewed coffee and tea. Customers who are signed up for rewards also get a free birthday treat each year.
Starbucks Stars accumulate by earning two stars for each dollar spent at participating Starbucks locations, either through the Starbucks phone app or by using a Starbucks gift card that is registered to accumulate Stars. Any purchase made of Starbucks brands like K-cups, premade coffee drinks or other prepackaged products that have a Stars code on them also count. Stars can be added to the loyalty account by scanning the receipt with the Starbucks app.
What’s Been Missing?
While customers clearly being able to enjoy a fresh cup of joe from Starbucks while shopping through Target and Kroger, there was one hiccup in the system — these locations use the point of sale system of the stores they reside in rather than the native Starbucks one.
That means that many Starbucks locations inside these stores have been unable to allow customers to use their reward points or place orders in advance using the Starbucks app. This has been a sore point for customers who want to use Stars or redeem a birthday gift in the past.
But now that’s about to change.
Chief marketing officer Brady Brewer announced the change at Starbucks Investor Day on September 13 in Seattle, saying that the experience customers were having at licensed locations was “inconsistent”.
To remedy the issue, Starbucks will roll out a new program called Starbucks Connect to licensed locations so customers can still get their Rewards benefits.
“Both rewards and mobile ordering have become key to the business in recent years, with accelerated growth during the pandemic,” Brewer said.
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