In New Your City opened the first from three planned until the end of 2022 co-joint pickup cafes of Starbucks and Amazon Go. The customers can preorder their preferred coffin beverage using the Starbucks mobile app and pick it up from the cafe counter. To enter the Amazon Go shopping zone, they need to use an “in-store code” from the Amazon app. In this way, they can shop using cashierless tech, do not need to wait in line or contact other people if they do not want to.
New York is famous for its food trucks, in front of which all main characters from the American movies meet while waiting in line. In addition, the city is legendary for the diversity of its people, but also their shared intolerance to the mediocre service and outdated life approach as a whole. Considering this, the choice of the “city that never sleeps” is not an accident.
We witnessed the first experimental Amazon Go store in January 2018, at the beginning of 2020 in Seattle opened the first full-size grocery store. But it is for the first time that we see a co-joint – in such scale as well – of techs like the Amazon Go and customer experience on site like the Starbucks. Now the customers will have an even bigger choice. They can preorder, monitor the prep and pick it up when ready. Or they can go and order in-store to the barista. They can grab it and continue their hectic day life routine. Or they can sit and consume it the traditional way.
This decision for Starbucks can be considered also a direct response to the pandemic changes. The company has announced earlier that it will close many locations and focus on pickup locations in urban areas and double drive-thru lanes at some of its suburban stores. Whether this could be a signal for partial repositioning from a place to spend your time to a place to spend time or pick up a tasty coffee (and food – after the collaboration with Amazon Go) is yet to see.
At the moment, it seems that both companies succeed in getting leverages for their brands.
Amazon retains its positioning as a digital and online leader and an innovative brand without risking an offline diffusion or letting the customer experience suffer. At the same time, Amazon does not need to create and develop its own network of cafes and pickup stores.
On the other hand, Starbucks is well-known for creating pleasant, comfortable conditions for people to gather together or spend some time on site. This brand adds another key association – for innovation and relevance to the changed expectations. And this, without having to invest or take risks to develop a whole new cashierless technology for products.
To answer if and how this collaboration will affect the brands, we must consider the extensive influence of the intermediate customer reactions on site. They could vary broadly from “it is so nice and convenient to have a choice from more options” to “I experience difficulty due to this complexity”, and in case of a disruption, even “my experience with the technology that broke is terrifying”. But enough prerequisites are created so that the experience is generally positive, even considering the risks.
An added value for the customer, especially the NewYorkers, is that at these conceptual pickup cafes, they will feel another step ahead between present and future and have a chance to experience and indirectly assess if this co-offer will be scaled.
An interesting survey on which brand will gain more from the joint activity from RetailWire shows that the most answers from marketing professionals focus on the mutual benefits for both brands. At the second position with very close results, come both assessments that Starbucks as a brand and Amazon Go as a brand will gain more advantages. This almost even distribution of the survey answers points out that one of the most critical conditions for a successful co-branding initiative is achieved – namely, to assure equality or at least reciprocity of the brand strength, approval, popularity.
Other requirements for a successful joint initiative are the relevant brand knowledge and the positive customer evaluation of both brands. In addition, Starbucks and Amazon fulfil the most critical condition of all – to provide logical compatibility between both brands.
The sphere of co-joint brand initiatives has a potential for development. Because in this way, they can retain to a great extent their identity and avoid spending too much money – for innovations or distribution networks in this specific example. From Amazon’s perspective, Starbucks offers crucial advantages that mather: popularity and developed locations network, trained personnel on-site, and a completely legitimate opportunity to enter the non-digital services without losing digital identity.
For the brands, such type of co-initiative creates an opportunity to improve their supply chain and distribution. Now, in the pandemic frames, we see how critical it is to provide a key component or deliver your products on time. Let’s recall that Amazon is among the pioneers that headed up to logistics years ago with its investment in different transatlantic logistic and transport solutions. And this enhances the probability that that distribution decision will also prove beneficial for the brand and successful from a business perspective.
For all marketing, digital and business development professionals, the co-joint conceptual pickup cafes of Starbucks and Amazon Go can be leading examples in several aspects. The first aspect is the search for and application of innovative solutions – always from the customer point of view. Always solutions that make the process more comfortable, more effortless for the people. Not modern for the sake of it.
The second one is the careful assessment of the added through the co-work knowledge and competencies. For example, Starbucks gains the digital skills of Amazon for cashierless buying, and Amazon gains the one-on-one customer service in physical stores. Meaning, both companies get or improve a value that is underdeveloped at the moment.
The third aspect considers the cost reduction for the brand presence of both companies. Another added value, typical for these marketing solutions, is the brand knowledge expansion into connected categories. Meaning, additional areas in the competitions reference frame of their positioning.
The fourth aspect relates to the increase of brand touchpoints for both companies. And, last but not least, that could be a viable additional source of income.
