Starbucks (SBUX) placed in Target (TGT) locations for over twenty years. Since 2003, almost every new Target store building has housed a Starbucks coffee shop (as long as there was enough space, that is). When an older Target store was remodeled, the popular coffee shop was usually worked into the remodeling.
Adding a coffee kiosk or mini coffee shop is pretty easy with many retailers like Target, Kroger (KR) , or Hy-Vee among many others, will be a great resource for both the host company and Starbucks. The mini centers are licensed to be run by the retailers and they pay a royalty or percentage back to Starbucks for the use of their business space.
Since the locations are run by the retailers, the coffee shop experience has not been consistent according to Starbucks Chief Marketing Officer Brady Brewer. Changes are underway to bring the customer experience on par with that of franchise and corporate locations across the US
Starbucks Gives You Free Coffee
Regular Starbucks customers have enjoyed the Starbucks loyalty program since its launch in 2008. Originally known as Starbucks Card Rewards before My Starbucks Rewards arrived in 2009, it allows customers to earn Starbucks Stars (the chain’s version of points) towards free drinks at gratis, additives, and food items. Customers can get free refill rewards on brewed coffee and tea. Customers who are registered for birthday rewards also receive a free birthday each year.
Accumulate Starbucks Stars by earning two stars for every dollar spent at participating Starbucks locations, by using the Starbucks phone app or by using a Starbucks gift card registered to accumulate Stars. Any purchases made of Starbucks brands such as K-cups, instant coffee drinks or other prepackaged products with a Stars code also count. Stars can be added to the loyalty account by scanning the receipt with the Starbucks app.
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Target, Kroger Get the Complete Starbucks Experience
While it’s clear that customers can enjoy a fresh cup of joe from Starbucks while shopping through Target and Kroger, there was one catch in the system — these locations use the point-of-sale system of their resident stores rather than the native Starbucks one. .
That means many Starbucks locations inside these stores were unable to allow customers to use their reward points or place orders in advance using the Starbucks app. This is a pain point for customers trying to use Stars or redeem a birthday gift in the past.
But now that is about to change.
Brewer announced the change at Starbucks Investor Day on September 13 in Seattle, saying the experience customers had at licensed locations was “inconsistent”.
To resolve the issue, Starbucks will implement a new program called Starbucks Connect at licensed locations so customers can still receive their Rewards benefits.
“Both mobile rewards and ordering have become critical to business in recent years, with accelerated growth during the pandemic,” Brewer said.