Your favourite espresso may be available to your front door soon with the touch of a button.
CEO Howard Schultz recently announced that the Seattle-based coffee company is experiencing a time of stagnant profits due to competition from other fast food restaurant giants.
According to Thursday reports, Starbucks quarterly sales for the fourth period ending on September 28 increased, but not enough. Sales in Asia and America reportedly increased by 5 percent.
Numbers show that the company made $587.9 million (77 cents per share) this past quarter. Revenue for Starbucks was $4.18 million, but still fell short by $6 according to financial analysts’ expectations.
Starbucks has tried to revamp its falling profits by adding new food items to its menu, including a grilled cheese sandwich. Its new Fizzio soda drink is only available in western markets at the moment, but launches sometime next year.
Nothing has changed for the company yet, but Shultz’s delivery app proposal may be the solution to the problem.
In a conference call last week, he mentioned the idea of delivering food and beverages for a limited time offer in a few selective markets.
"Imagine the ability to create a standing order of Starbucks delivered hot or iced to your desk daily,”
In hopes that the new app will bring along more income, Starbucks also hopes that it will create customer loyalty.
However, a professor at Boston University’s School of Hospitality Administration says that it will actually cause distance between Starbucks and its customers.
"Delivery breaks the bond between the customer and the Starbuck’s ’Third Place’ (concept)," said
Starbuck’s ’Third Place’ business concept states how the company wants to make sure they’re the “third place between work and home” that every customer considers as they commute on a daily basis.
Looking at the new business proposal from a financial perspective, some critics believe that delivery service may not be such a smart idea for Starbucks.
Economically, Starbucks may not benefit much from delivering items that are in smaller quantities and price value.
Some have suggested that the company consider moving in a catering service direction, where orders are only delivered to offices with a $25 or more purchase.
In addition to the delivery app, Starbucks will soon incorporate pre-order and pre-paid options made available only in Portland, California during an initial launch period.
Employees can also expect a raise within the next few months along with a new relaxed dress code policy.
Starbucks is pushing forward the freedom of expression within its workplace, which involves revealing tattoos, piercings, and wearing more fashionable business attire.
As far as the delivery and pre-order options, both services will be integrated into the company’s existing mobile app by early 2015.