Target is set to enhance customer convenience with the introduction of Starbucks curbside delivery at over 1,700 stores across the nation. Following a successful pilot program at select locations last fall, Target plans to make this service available at all stores with a Starbucks cafe by October.
The partnership between Starbucks and Target has flourished over the past two decades, with many customers considering a trip to Target incomplete without a Starbucks coffee. In fact, some of the retailer’s newer shopping carts even come equipped with built-in drink holders. According to executives, Target served over 170 million Starbucks beverages in 2022 alone.
As consumer preferences evolve towards contactless options, Target recognizes the need to adapt. Drive Up, a curbside pickup service, has already proven to be a game-changer for customers short on time. Mark Schindele, chief stores officer at Target, emphasized the convenience it adds to guests’ daily lives.
Notably, the Drive Up service with Starbucks has been exceedingly popular among guests. Among the top-selling items are iced brown sugar oatmilk shaken espressos, birthday cake pops, and iced caramel macchiatos. With this new initiative, Target aims to bolster sales heading into the second half of the year.
Target’s Drive Up and Starbucks Partnership
Target, a leading retail chain, is introducing a new feature to enhance the customer experience. Once shoppers receive a notification that their Drive Up orders are ready for pickup, Target’s app will provide the option to place an order from Starbucks. Upon arrival at the parking lot, an employee will conveniently bring up both the Target and Starbucks orders at no extra cost.
The Starbucks outlets within Target are considered licensed stores, meaning that Target manages all aspects of the cafe, including employing baristas and implementing mobile order capabilities. These partnerships have proven to be mutually beneficial, allowing Target to increase foot traffic and revenue. All food and beverage sales go directly to Target’s bottom line.
In recent times, Target has faced various challenges, such as excess inventory and declining customer traffic. Additionally, the company has been entangled in several controversies that have affected other consumer-facing companies this summer. Consequently, Wall Street analysts have become more cautious about Target’s stock, downgrading it or reducing price targets. The company’s second-quarter earnings report, scheduled for next week, will shed further light on its performance.
Despite these obstacles, Target remains optimistic. Although the stock has declined by 12% this year, it is important to note that the S&P 500 has enjoyed a 17% gain during the same period. This new Drive Up and Starbucks partnership showcases Target’s commitment to meeting customer demands and enhances its competitive position in the retail industry.