At the Starbucks annual shareholder meeting today, the company plans to unveil new details of its highly anticipated delivery service launching in the second half of this year in Seattle and New York City.
In Seattle, Starbucks says it will be working with Postmates, the well-known same-day delivery company, to deliver coffee by bike and car within the city limits. In New York City, Starbucks will be relying on its own baristas to hand-deliver beverages through a service it’s calling Green Apron.
In January, CEO Howard Schultz hinted the two pilots were coming, but this is the first time we are hearing more details about the operations. Word of the two pilots closely follow the launch of mobile Order & Pay in 650 cafes around the Northwest, including Seattle, where people can pick-up their drinks within minutes of placing an order inside the Starbucks app.
The new delivery service represents a further expansion of Starbucks mobile services, which all stem from its wildly successful mobile payments application. At the annual shareholder meeting, the company will also be reaffirming several financial and operational goals, such as growing the company’s market capitalization to $100 billion, up from $70 billion today.
In an interview in advance of today’s meeting, Starbucks Chief Digital Officer Adam Brotman told GeekWire that there’s big expectations for the mobile ordering service, which will be live across the U.S., United Kingdom and Canada by the end of the year.
But, he says, plans for delivery are more fluid.
“We are no less enthusiastic about it, but we aren’t as far along in the process,” he said yesterday. “We are in learn mode. We believe that using the mobile platform, in general, and delivery, is part of the overall ecosystem we are building. This is going to be a core experience and customers are going to love it.”
Already, people can use Postmates to get a cup of Starbucks coffee, but this partnership will be different. Under the relationship, Postmates will be built into the Starbucks app, allowing customers to still earn rewards on their purchases and make payments using Starbucks gift cards or a credit card on file. Starbucks declined to say whether it was an exclusive partnership with Postmates, or whether it could work with other delivery services in the future.
In a separate interview, Bastian Lehmann, Postmates’ co-founder and CEO, said: “We are excited about integrating into one of the most successful commerce apps out there. We will have a very deep integration into mobile pay. That’s what we love about the opportunity to work with Starbucks.”
There are still a lot of logistics for the two companies to figure out before launch, ranging from what containers to use to keep beverages hot; how to estimate delivery times and whether to make all food and beverages available for sale.
Brotman and Lehmann both confirmed the delivery service will cost an undisclosed flat fee. Currently, Postmates’ delivery fees start at $5 and can scale up based on the distance from pick-up to drop-off. Lehmann said the drivers receive 80 percent of the fee and Postmates pockets the rest.
In New York, the Green Apron delivery service will operate much differently.
Baristas working at stores within large office buildings will be allowed to hand deliver orders to tenants inside the same building. Starbucks will initially launch in New York City’s iconic Empire State Building in midtown Manhattan.
“The baristas are already in the building, so there’s an efficiency and capability aspect — they don’t have to go far to get to you,” Brotman said. He said he’s excited to see how people will use the service, “but I could imagine a lot of regulars that say show up every morning at 8:30 a.m. It will be fun to watch those relationships develop.”