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Hot or not? Starbucks delivery won't be easy, say experts

Bruce Horovitz and Jolie Lee
USA TODAY
In this March 19, 2014, photo, Sandy Roberts, Starbucks strategy manager for global coffee engagement, pours samples of coffee for shareholders and other guests at Starbucks' annual shareholders meeting in Seattle.

Experts are scratching their heads wondering how Starbucks will possibly pull off delivery.

On Thursday, CEO Howard Schultz announced plans to offer limited food and beverage delivery in some markets in the second half of 2015. Although he gave no details -- and Starbucks officials are offering few more today -- the delivery option would be tied to its mobile app.

"Imagine the ability to create a standing order of Starbucks delivered hot or iced to your desk daily," said Schultz during a conference call following the coffee giant's third quarter earnings report. "That's our version of e-commerce … on steroids!"

For a company that specializes in serving hot, customized beverages -- and which prides itself on the sensory theater of coffee --any delivery offering would be long, long way from that core, experts say.

A man drinks a Starbucks coffee in New York.

"Delivery breaks the bond between the customer and the Starbuck's 'Third Place' (concept)," says Christopher Muller, professor at Boston University's School of Hospitality Administration, referring to the company's goal to be the third place people go to between work and home. "Maybe sitting at my desk lost in a Proustian reverie with my coffee is good enough, but the experience is certainly not the same."

Even then, says Muller, because of declining retail foot traffic in an Internet age, it might be worth a try. But even then, he says, there would need to be a relatively high minimum order for delivery to make economic sense for Starbucks. "They can't make it work at an $8 price point," he says. Any minimum below $15 probably wouldn't work, he says.

Perhaps it will be less a delivery service and something closer to a catering service, suggests Bob Goldin, executive vice president at Technomic, the restaurant industry consulting firm. "Nothing surprises me, but running up with muffin and Frappuccino for $7 doesn't seem like it could work economically."

Goldin suggests the minimum order would probably need to be closer to $25 -- and it would probably need to be limited to office delivery.

The company doesn't have details yet about how the delivery option would work, including where it would be available and what kind of delivery fee would be associated with the service.

The service will be built into Starbucks' existing mobile app, said Adam Brotman, Starbucks' chief digital officer, in a phone interview with USA TODAY Network.

Starbucks has been pushing its mobile app that allows customers to place orders ahead of time and pick up their order without waiting. The pre-order option will first be introduced in the Portland area before the end of this year.

Starbucks has already been building a customer-loyalty program through its mobile payment app and says about 15% of all purchases are made with mobile devices.

Follow @JolieLeeDC on Twitter.

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