Starbucks Teams with Amazon to Launch One-of-a-Kind Store

Multinational coffeehouse chain Starbucks Corporation (SBUX) collaborated with global e-commerce giant Amazon (AMZN) to launch a one-of-its-kind Starbucks Pickup with Amazon Go store, in New York City Starbucks. The collaboration aims to combine the digital and physical retail experiences.

Starbucks shares gained 1.4% during the pre-market trading session on November 19. (See Starbucks stock chart on TipRanks)

The store will offer a curated selection of customer favorites from both Starbucks Café and Amazon Go’s Just Walk Out Shopping experience.

Details of the New Walk Out Store

The new location in New York City will serve drinks and cover the rest of Starbucks’ menu, as well as a curated assortment of food and beverages in the Amazon Go market, including freshly prepared salads, sandwiches, bakery items, and other snacks options. The store will maintain the same staffing level as any other Starbucks store.

The new store will also have a modernized lounge, including individual workspaces and expanded tables with power outlets and USB ports.

Customers can place an order on the Starbucks app before arriving at the store. Upon arrival, they can check the status of their order on a digital screen and then grab their order directly from a Starbucks barista.

Customers have the option to use a credit card, Amazon Shopping app, or Amazon One palm reader to shop at the Amazon Go market, similar to any other Amazon Go store. They can use Amazon’s Just Walk Out technology for a smooth checkout experience.

Together, both companies plan to open 2 more stores in the U.S in 2022.

Management Weighs In

Katie Young, SVP of global growth and development at Starbucks, said, “Our goal with this new store concept is to give our customers the ability to choose which experience is right for them as they go through their day, whether it is utilizing the Starbucks and Amazon apps to purchase food and beverages on the go, or deciding to stay in the lounge for the traditional third place experience Starbucks is known for.”

Dilip Kumar, VP of physical retail and technology at Amazon, said, “Customers have enjoyed the effortless shopping experience enabled by our Just Walk Out technology at Amazon Go where they can simply come in, grab something delicious to eat or drink, and just leave and carry on with their day without having to wait in line to pay.”

Wall Street’s Take

The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 14 Buys and 8 Holds. The average Starbucks price target of $124.24 implies that the stock has upside potential of 11.6% from current levels.

Starbucks scores an 8 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. Shares have gained about 15% over the past year.

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