Starbucks (NASDAQ:SBUX) stock has soared higher in the past 12 months, up about 43%. This excellent performance is driven in part by investor confidence in the company's ability to beef up its mobile experience, which is already arguably best-of-class. One facet of mobile the company is testing is delivery. Here's what investors need to know.
Starbucks delivery expands to Seattle
After a trial run in New York at the Empire State Building, Starbucks' delivery service has now expanded to Seattle. The move follows what Starbucks CEO Howard Schultz referred to as "favorable customer and media response" to the company's Empire State Building delivery program during the company's fourth-quarter earnings call.
Since Starbucks first announced in March at its annual shareholder meeting it would be soon be experimenting with delivery, the coffee chain has launched in both New York and Seattle.
Like the program in New York, the Seattle delivery service is limited to specific areas, initially covering "Downtown, South Lake Union, Capitol Hill, Madison Park and SoDo neighborhoods," according to Re/code.
Customers placing a delivery order will have to pay an additional $5.99 fee, and Postmates, a third-party delivery company that employs freelancers, will pick up and drop off customer orders.
Starbucks' use of an independent delivery service in Seattle differs from its practice in New York City, where the company's own employees make deliveries in the Empire State Building.
"There's no minimum order," according to Seattle Times business reporter Angel Gonzalez, who tried the service, "but there's a maximum of 8 items per trip."
The mobile priority
The delivery service is a natural extension of Starbucks' mobile ordering, which it rolled out to all U.S. locations in September.
The company has been aggressive with its expansion of mobile features. And investors shouldn't expect the coffee maker to slow down with its mobile offerings any time soon. Consider this excerpt from Starbucks' most recent earnings call, via a Seeking Alpha transcript, in which Schultz details the company's vision in mobile:
And I think if you look at the retailers that are succeeding, I'm not talking about people in our core business but all retailers anywhere in the world, it has to be an experiential, emotional experience where the retail experience is really exceeding the expectation of the customer. And so we went back to work on that and I think we also believe very strongly that we had to seamlessly integrate the Starbucks experience with all things mobile. And as I said in my prepared remarks, we are living in a mobile-first global economy and we're witnessing that kind of change.
Starbucks isn't attempting to keep up with patterns in the coffee business, but to seek insights from companies with the best retail experience in the world -- no matter the industry. And mobile, Schultz believes, is a clear priority in creating the best possible customer experience.
Starbucks delivery may still be in pilot testing, and it may seem a bit out of the ordinary, but if anyone is going to try such an extreme interpretation of the mobile experience, it's going to be Starbucks.