Let’s face it: that Starbucks coffee sure does taste good. You know it, I know it, and all of those people who are currently standing in line waiting for their next cup of coffee know it also. Since it is so popular, it may come as somewhat of a surprise to you to learn that Starbucks is currently dealing with slowing foot traffic in their stores – not as many people are visiting them these days. At the same time, a lot of other companies have realized that people are willing to pay a lot of money for good coffee and so competition in the coffee shop business has shot up. The product managers at Starbucks are going to have to get creative and make changes to their product development definition if they want to keep their profits up.
Say Hello To Coffee Delivery
So what are the Starbucks product managers going to do to keep the money coming in? Simple – they are going to start delivering Starbucks coffee to where their customers are. If they can get this right, then they’ll have something to add to their product manager resume. They want to turn the whole world into one big Starbucks store. The goal for Starbucks is to find a way to meet their customers where they are. Starbucks is going to roll out a delivery service in a number of major U.S. cities using the Uber Eats delivery service.
Starbucks is going to start its delivery service in San Francisco (where else?) and then expand it to Boston, Chicago, Los Angles, New York and Washington D.C. Ultimately, they hope to end up making up to 25% of their U.S. Starbucks stores be able to provide delivery service to customers. The name of the new service will be “Starbucks Delivers”. The Starbucks product managers believe that they have untapped customer demand that they can meet with this new service. They hope to be able to expand their in-store experience to their customers who are both in their stores and outside of them.
In order to make this new service successful, the Starbucks product managers are trying to use what they have learned during past delivery pilots that they have conducted. They are also going to the effort of integrating their Starbucks ordering technology directly with the Uber Eats communication system.
Starbucks Gets Ready To Make Some Changes
What the Starbucks product managers are trying to do is to allow customers who are using the Uber Eats application to order virtually anything that is on the Starbucks menu that they could order if they were in a Starbucks store. Currently 95% of the Starbucks menu is available through Uber Eats. What Starbucks is trying to do is to make sure that orders will be delivered within 30 minutes (or less). Delivery fees are going to start at US$2.40.
The Starbucks product managers want to get into the delivery business because they realize that if done correctly, it could mean a lot of money for Starbucks. However, there are challenges with offering a service like this. One of the biggest issues is that delivering coffee, as a product, comes with a number of logistical challenges. Specifically, the quality of the coffee that is being delivered is susceptible to both drops in temperature and the passage of time. The product managers are trying to deal with these issues by using splash-proof lids on the coffee that is being delivered. The goal of these delivery cups is to keep the coffee at its appropriate temperature.
The Starbucks product managers don’t want to stake all of their hopes for tuning the company around on one idea. Instead, they are trying a number of different things all at once. Last year, they raised their prices on all of the items in their store by between 1% – 2%. The company is also starting to put more of an emphasis on customer service and convenience. They are doing this by adding more drive through lanes at certain locations and by making the Starbucks app available to everyone, not just members of their rewards program. Starbucks views their new focus on coffee delivery as being a natural next step.
What All Of This Means For You
Clearly the Starbucks product managers can read the writing on the wall. Online delivery services have exploded in the past few years and this has shaken up the food and beverage industry. If the Starbucks product managers don’t take a look at their product manager job description and do something, they are going to get left behind.
The Starbucks product managers are going to start to deliver Starbucks coffee to customers no matter where they happen to be. They will use the Uber Eats service to accomplish this. The delivery service is going to be rolled out city by city and the company hopes to eventually have 25% of their stores supporting the new service. The Starbucks ordering system will be integrated with the Uber Eats communication service. Almost all of the Starbucks menu will be available to Uber Eats customers to order. There are challenges that come along with delivering coffee and these include product temperature and time required. Starbucks is not putting their apples in one bucket and they are making other changes to help them boost their revenues.
In all honesty the Starbucks product managers needed to do something. Just about every other restaurant and store now has a delivery option. If Starbucks didn’t take action on delivery, then their competition would have. Now what the Starbucks product managers are going to have to make sure that happens is that their customers have an excellent customer experience: hot coffee and prompt service. If they can do this, then people won’t think twice about ordering Starbucks to be delivered!
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™
Question For You: Do you think that the risk of delivering cold coffee that takes too long to arrive is worth the risk that Starbucks is getting ready to take?
Click here to get automatic updates when The Accidental Product Manager Blog is updated. P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!
What We’ll Be Talking About Next Time
So when you walk into the space that you live in, what’s the first thing that you do? For many of us, the first thing that we do is to shout out “Hey, Alexa turn on my music” or “Hey Google, turn on the lights in the kitchen.” These virtual assistants who are always there waiting for our next command to them have become a part of our lives. As powerful as they are, the product managers who make them understand a dirty little secret. They’ve started to hit the wall in terms of what they can do for us.