- Amazon and Starbucks want to launch a new co-branded lounge that would put Amazon Go stores without a cashier in a coffee shop.
- The new cafe would sell both Starbucks craft drinks and food items sold in Amazon Go stores.
- The companies are behind schedule as they planned to launch the first proof of concept store by the fourth quarter of last year.
Amazon has been in talks with Starbucks to set up its cashier-less Go stores in a new co-branded cafe, as part of an effort to expand the “Just Walk Out” technology found in those stores, Insider has learned.
According to Amazon internal document obtained by Insider.
The initial store layout shows the food section of Amazon Go in a cafe with a seating area. Customers are expected to use separate apps to pay – Starbucks’ app for drinks and Amazon’s app for food – though companies may want to create an integrated solution. The store was to have a newly created brand.
This project may no longer be in the works. Discussions have been active until at least July of last year, according to the document, but companies have not met their plans to open the first proof of concept store in Q4 2020 and up to six. stores until 2021. In June of last year, Verde was one of the “Top Ten Initiatives for Starbucks” as it aligned with the company’s desire to double pickup and drop orders. eliminate queues, “according to the document.
âOur plan is to launch a co-located store, where customers can enjoy craft drinks at a Starbucks coffee shop and / or buy delicious take-out on Amazon Go, without queuing,â the document said. “We expect Verde to have its own branding, with elements from Amazon and Starbucks.”
The plan once again demonstrates Amazon’s ambition to expand the JWO technology behind its cashless Go stores in new areas. In stores supported by JWO, customers can simply walk in by scanning their phone, pick up whatever they want, and automatically pay when they leave. Amazon has started rolling out JWO technology to some of its grocery stores and Whole Foods stores this year, while other locations, including Hudson nonstop and TD Garden, also plan to use the service. Amazon also has a team of engineers working on a smart refrigerator that uses computer vision technology found in Go stores, Insider reported previously.
The potential partnership could give Amazon new monetization channels for JWO technology, as its cashier-less Go stores remain largely unprofitable, according to two people familiar with the matter, who spoke on condition of anonymity to discuss sensitive topics. An Amazon-branded coffee is said to be the e-commerce giant’s latest foray into physical stores, which already includes grocery stores, bookstores and a hairdresser, among others.
It is not known when the new store will officially launch, and it is possible that the two companies will ultimately decide not to go ahead with the project, one of the people said. Representatives for Amazon and Starbucks declined to comment.
Here is a rendering of the store layout, found in the document:
“Amazon Go as a service”
It wouldn’t be the first partnership between Amazon Go and Starbucks. Amazon began offering self-serve Starbucks coffee at two of its Amazon Go sites in 2019.
But the new store idea for Verde would be totally different since it creates a separate Amazon Go section in a Starbucks-type cafe. Verde’s target customers are “time-pressed professionals” between the ages of 25 and 45, who live in “densely populated urban cities,” the document said. The top three customer use cases include pre-orders through the Starbucks app; take out via the Amazon Go store; or sit & stay guests who wish to enjoy both the food and beverage options inside.
For Starbucks, the new store would help improve its customer experience by eliminating queues, according to the document. Starbucks also believes a âthird placeâ away from home and work will still be important after COVID, and wants the store to include lounge seating. The new store may also provide increased foot traffic and a more cost effective way to add food to their cafes, as Amazon will take care of the food supply chain, according to the document.
In Amazon’s case, the partnership is a “scaling mechanism,” the document says. Starbucks stores would give Amazon access to a “much larger real estate pipeline” to launch cashier-less Go stores at a faster pace and at a lower cost than a stand-alone Go store.
âVerde is Amazon Go as a Service, which means retailers integrate an Amazon Go (where Amazon owns customer identity / authentication, catalog, merchandising, supply chain, planogram, fixtures and the income statement) in their stores to offer customers a new selection and new shopping experiences, complementary to theirs, âsays the document.
Amazon currently operates about two dozen Go stores and 18 Fresh stores in total, as well as about 500 Whole Foods stores.
The two companies were unable to agree on some operational issues, leading to further delays, one of the people told Insider. These topics include which company should be in charge of the in-store workforce and how to handle the different payment experiences for Starbucks and Amazon products in the store, according to the document.
Starbucks also wants to allow customers to earn loyalty points when shopping in the Amazon Go store section. Amazon, meanwhile, is not entirely sure about the format of the lounge, as most customers could simply pre-order for pickups. The two companies are also considering closer integration in terms of loyalty programs and payment methods, with plans to eventually allow customers to pay for Starbucks drinks with Amazon’s own app, or vice versa, according to the document. .
âIn the long run, Verde is a concept that delivers the best of Amazon and Starbucks, in terms of accepting loyalty programs, Prime discounts and other perks,â the document said.