Target and Starbucks Elevate Curbside Pickup Service

Target is revving up its sales strategy by integrating Starbucks products into its curbside pickup service, Drive Up. The Minneapolis-based retailer confirmed on Wednesday that they’ll be bringing this feature to more than 1,700 stores that host Starbucks cafes. This expansion covers the vast majority of Target’s nearly 2,000 locations. The plan is to start the nationwide rollout this summer and complete it by October.

• New Feature: Customers can now add Starbucks coffee or snacks when picking up their Target curbside orders.

• Initial Testing: This Starbucks integration was initially trialed in select stores during the fall.

• Expansion Plan: The offering is set to be introduced to various Target outlets across the US by October.

Deepening Customer Engagement

Target, aiming to boost sales and strengthen customer loyalty, has been experimenting with various strategies. This integration is just one of the measures taken to enhance the shopping experience. Their endeavors also include:

• Opening more mini Ulta Beauty shops.

• Introducing curbside returns.

• Accelerating shipping times.

Having a licensing agreement with Starbucks, Target employs baristas at their in-store Starbucks cafes. The move to test Starbucks curbside pickup emerged from customer feedback. Shoppers were especially keen to add Starbucks items while picking up their online orders, making the integration a natural progression. Popular items during the test phase included the Iced brown sugar oat milk shaken espresso, birthday cake pop, and iced caramel macchiato.

Drive-Up’s Surging Popularity

Target’s Drive Up service has witnessed tremendous growth, particularly during the COVID-19 pandemic. Notably:

• Target’s annual revenue surged approximately 40%, a rise of about $31 billion from January 2020 to January 2023.

• Customers using the Drive Up service for the first time increased their spending by 20% to 30%.

• Recent expansions have included the addition of more items to the Drive Up service, such as alcohol.

However, it hasn’t been smooth sailing for Target throughout the past fiscal year, grappling with unsold inventory and larger-than-anticipated markdowns. The company also fell short of Wall Street’s earnings estimates for three quarters.

The Starbucks Edge

On the other hand, Starbucks has been evolving its store formats to meet the changing customer needs. Recent trends indicate that customers spend less time inside cafes and more time placing orders via mobile apps or using drive-thru services. Starbucks has been adapting by opening cafes specifically for mobile orders, complete with walk-up windows, and even setting up inside Amazon Go locations.

Starbuck’s collaboration with retail outlets, such as Target, has boosted sales for the coffee chain and driven traffic for the retailers.

Adding Ease and Joy to Every Target Run

Mark Schindele, Target’s Chief Stores Officer, highlighted the importance of listening to their customers. Many expressed that integrating Starbucks with Drive Up would provide added convenience, especially during tight schedules.

To utilize this new feature:

• Place a Target pick-up order.

• Once notified that it’s ready, notify the store of your arrival. Receive a prompt via the app to place a Starbucks order.

• Choose “add for drive up”, pay, and wait for your complete order to be delivered to your vehicle.

This collaboration between Target and Starbucks, spanning over two decades, is a testament to both companies’ commitment to improving customer experiences. Target has always been responsive to customer feedback, and the ability to add Starbucks items to Drive Up was among the most sought-after features. The pilot program that ran during 2022 and 2023 proved efficient for staff and enjoyable for customers, setting the stage for this nationwide rollout.