Starbucks on your smartphone: How the coffee giant is going digital
Starbucks is preparing to expand a mobile order-and-pay-ahead option nationally over the next year, plus has plans to expand food offerings.
Ted S. Warren
In select areas, the chain also plans to offer delivery by late 2015.
"Delivery is one of our most requested ideas," Adam Brotman, chief digital officer at Starbucks, said at the company's investor day in Seattle.
The new ordering options and a dramatic increase in US food sales were part of the plans Starbucks executives laid out to drive up profit over the next five years. To convince more people to get something to eat with their drinks, Starbucks has already revamped its baked goods and introduced new sandwiches, snacks, and salad boxes.
The push has been paying off. In its most recent quarter, the company said breakfast sandwich sales rose by 30 percent. Still, it said its share of the fast-food lunch market remains at around 2 percent.
Starbucks says its food push will be helped by making beer and wine available in up to 25 percent of its 12,000 US stores over the next five years. That program, which includes small plates such as chicken skewers after 4 p.m., is already in select stores around the country.
The transformation of stores in the evenings into a place to grab a glass of wine will also make Starbucks more of a social destination or place to unwind, executives said. That should help brace against the shift to online shopping, which Starbucks CEO Howard Schultz has warned will hurt traditional retailers and malls.
The expansion into a variety of areas beyond coffee comes as Starbucks itself seeks to keep up its sales momentum. In its last fiscal year, sales in its flagship Americas region rose by 6 percent in established locations. The figure had grown 7 percent in the previous year, and 8 percent in the year before that.
As Starbucks continues to offer more food and drinks, Brotman said mobile ordering will play an important role freeing up workers to handle more tasks behind the counter and cut down lines in stores.
"Customers using mobile ordering are going to be given back the gift of time," he said.
He also noted the mobile app lets the company suggest other items people might want to buy, which drives up sales as well.
The first region to get mobile ordering was Portland, Oregon, where the service was launched on Wednesday. Spokeswoman Alisha Damodaran said people were able to select from 150 stores where they could pick up their orders.
Starbucks Corp. plans to gradually expand the offering nationally over the next year.