Starbucks’ latest innovation doesn’t include camera-driven invisible checkout and doesn’t even come from Seattle. But for rank and file retailers, it may prove even more informative than watching the progress of Amazon Go.
While many are seeking to emulate Amazon's checkout-free layout, it's become clear that this is not a one-size-fits-all design. Such stores typically must be built from the ground up with checkout-free technology in mind; and even in that case, customers may balk at the changes.
Starbucks' latest retail experiment is designed to innovate where possible, but also to preserve the old ways for consumers who don't want to change their habits.
The coffee chain's mobile-heavy pickup-only store originally debuted in
But Starbucks isn't going so far as to bring the mobile payment aspect into its store. By focusing on order-ahead — a process it began rolling out in late 2014 — Apple sidesteps the many issues that Amazon, Sainsbury's and others have faced in trying to get shoppers to change habits.
The new Manhattan store is a companion to Starbucks' mobile order and delivery partnership with Uber Eats, and the pickup-only stores may also open in Chicago, San Francisco, Seattle and Los Angeles in the next year. In this way, Starbucks is like Amazon and Walmart, constantly tinkering with new payment and store models, testing models that could either lift or threaten all other retailers.
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“Those retailers, convenience stores, cafes, QSRs, etc. that serve the convenience market have to be looking hard at making their in-store experience as convenient as possible and at how payment plays into that,” said Rick Oglesby, president of AZ Payments Group, adding few payments companies are equipped to service these evolving multifaceted needs, which creates big opportunities for next-gen payments companies as well as for point of sale providers and other retail/food software companies to incorporate payment into their value-added solutions. “This includes pre-ordering, streamlined checkout, loyalty solutions, the impacts of Amazon Go and other automation that can give customers what they want,” Oglesby said.
Starbucks did not provide an interview for this story. In an email, a spokesperson said the pickup store format is one piece of Starbucks vision to modernize the customer experience in Starbucks stores.
“We know that Starbucks customers live increasingly busy lives, and it is our goal to deliver an experience that is comforting and stays with them after they leave our stores,” the spokesperson said. “This phased approach — which will include uplifting existing stores and introducing new store formats, as well as innovating technology and equipment — will also allow us to listen to our customers, adapt and learn, better positioning our business for the future."
While all three of these companies carry a reputation for squeezing other businesses, their nearly constant investment in new store concepts may backfire. The public nature of their experiments makes it possible for startups to learn from their mistakes, and sell a product to less innovative rivals.
“Amazon Go and Walmart’s retail labs are key to payment innovation in the United States. Having large merchants willing to place capital expenditures in research and development will ultimately make the other retailers better in the long term,” said Krista Tedder, head of payments research for Javelin. “Smaller companies cannot afford to take big risks that these larger companies can, so they need to look elsewhere. Large technology companies and payment processors are keeping up with the development of Amazon and Walmart. ... Merchants are happy to see what works for someone else before they spend the capital to mirror behavior.”
