Starbuck’s Delivery a Risk Worth Taking
Tom Dougherty, CEO – Stealing Share
4 November 2014
Starbucks’ new business plan includes home deliveries
Nobody can ever say that Howard Schultz, the CEO of Starbucks, is afraid of trying something new.
With a poor quarterly sales report ripe on his heels, Schultz announced that “we are playing offense.” His recipe for success is to roll out a delivery service that will use crowdsourcing tactics like companies Uber and Deliv do. Starbucks would potentially pull from a large group of part-time workers willing to deliver drinks and food within a specified radius. Deliveries would cost around five dollars and drivers would earn an hourly stipend for driving costs.
With multiple orders happening per delivery, this is a pretty cost-effective option for Starbucks.
To kickstart the new model, users will be able to order drinks using the Starbucks App on their phones, and they can also pick up coffee in a store, without the wait.
The hope here is to have users engaged with the online services provided by Starbucks, which would then, it hopes, pave the way for those same users to place orders for delivery at home.
My only concern is that Starbucks has built its brand around an experience, from placing the order, watching the coffee made and drinking and lounging in its stores. But the brand has been powerful enough to make inroads in the coffee pods market, so it’s possible that this could work.
All in all, this is a bit of a gamble by Schultz, but that’s what I like about him. A great leader is willing to take risks in the face of adversity.
Napoleon once said: “Victory belongs to the most persevering.” If Schultz’s past and present plans are any indication, his strategy for home deliveries will work just fine.
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