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Starbucks to open pickup-only location in Toronto

At less than 1,000 square feet, the new store in the PATH will cater mostly to customers who order ahead through their mobile app

Click to enlarge.

Click to enlarge.

Customers accustomed to hunkering down for hours to work or socialize won’t be able to do so at the newest Starbucks format that lacks seating and encourages people to grab their drinks and go.

Starbucks Canada announced Tuesday it would open what it called a pickup store in downtown Toronto’s underground pedestrian complex, the PATH.

Less than 1,000 square feet, the location is smaller than most Starbucks stores. It caters to customers who order ahead on the company’s mobile app and grab their beverage in store.

Customers can still order and pay in person, a company spokeswoman said in an email, “but this is not the optimal experience for this store.” However, that method allows consumers who want to bring a reusable cup for their drink to do so.

The company piloted the concept in Seattle, and opened the first location in New York City in November. Toronto’s Commerce Court spot is slated to open Feb. 4.

This new format “is designed to modernize and reimagine the customer experience in high-traffic, urban areas,” wrote Michael Conway, president of Starbucks Canada, in an email.

Starbucks has no specific plans to expand pickup stores in Canada, but this format “is designed for high-traffic urban areas,” he said.

The move is part of a trend in which companies are experimenting with take-out only locations as restaurants tackle how to best serve customers who increasingly demand online ordering and delivery.

“Everybody is trying to figure out what’s the next great or what’s the appropriate store format in this new digital age,” said Vince Sgabellone, a food service industry analyst with market-research firm NPD Group.

The rise of food-delivery apps in Canada, including UberEats, Foodora and DoorDash, has accustomed consumers to feeding almost any whim on demand and prompted a rethink of traditional eatery formats as people showed a preference for eating at home.

“Digital is changing the landscape: how people order, how people interact with their food-service brands. It’s all changing, and all the operators are trying to figure out, ‘OK, what’s best for my customers?'” said Sgabellone.

Starbucks has been ahead of the curve in terms of its investment into the customer’s digital experience. The company introduced its mobile app in 2010 and gave customers the ability to order online for in-store pick up in October 2015.

That has given their customers time to get accustomed to ordering coffee digitally, said Joel Gregoire, associate director for Mintel Canada’s food and drinks reports, pointing to the chain’s investment into the customer’s digital experience..

Starbucks said it couldn’t share specifics as to what percentage of its sales come from digital ordering in Canada, but Conway said the company was “seeing healthy growth” from active loyalty program members with the mobile order and pay option.

For these customers, “it really doesn’t require much of a leap” to shift to the new location, said Gregoire.

 

 

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