(Bloomberg) — Starbucks Corp.’s first stop on the road to becoming a delivery service: the Empire State Building.
The coffee chain announced plans on Wednesday to begin testing delivery in New York and Seattle, with the iconic 102-story office tower serving as its Big Apple proving ground. In New York, customers will order through a Starbucks website and eventually transition to its mobile app.
Chief Executive Officer Howard Schultz has said delivery is a logical extension of Starbucks’ digital strategy, which he calls “e-commerce on steroids.” The company’s mobile app has 14 million users, and customers at 650 locations in the Pacific Northwest can now order ahead and pay for coffee on their phones. The next step is bringing lattes and mochas directly to customers at their desks, or front doors.
“We’re taking the definition of the Starbucks run to a whole new level,” Adam Brotman, the company’s chief digital officer, said in an interview. “We’re really excited about how this mobile ecosystem is coming together and allowing us to add new features.”
Starbucks is hosting its annual meeting in Seattle Wednesday, where executives are expected to talk about the delivery service. It’s slated to begin in the second half of this year, with customers charged a flat fee.
About 18 percent of Starbucks sales in the U.S. now come through its mobile app, and the company takes some 8 million payments through customers’ phones each week, Brotman said.
The expansion of mobile payment comes as Starbucks is allowing more customers to bypass lines at its stores by ordering ahead of time. Following a test at 150 cafes in Portland, Oregon, Starbucks expanded mobile order and pay to each of its 650 company-owned stores in Oregon, Washington, Alaska and Idaho. That program will expand nationwide by the end of this year, Brotman said.
Starbucks announced in October that it would introduce delivery service in select markets this year. In Seattle, the company will form a partnership with Postmates, an on-demand service, to offer delivery to customers who live near a Starbucks location. Postmates, based in San Francisco, currently operates in 22 markets and has made 1.6 million deliveries since it started operating in 2012, Bastian Lehmann, the company’s CEO, said in an interview.
There’s a Starbucks location in the Empire State Building that will be expanded to create an area dedicated to the delivery orders, Brotman said. In addition, Starbucks is working on ways to allow office workers to pool their orders, he said. The company received several inquiries from buildings in New York before settling on the Empire State Building.
“Now that we’re public with this, I’m sure we’ll get a lot of requests from buildings wanting this service,” Brotman said.