Starbucks (SBUX) it was at Target (TGT) locations for over two decades. Since 2003, a Starbucks coffee shop has gone into nearly every new Target store construction (provided there was enough space, that is). When an older Target store was remodeled, the popular coffee shop was usually remodeled.
The convenience of being able to essentially add a coffee kiosk or mini coffee shop to many retailers like Target, Kroger (KR) , or Hy-Vee among many others, was a big plus for both the host company and Starbucks. The mini-locations are licensed by the retailers and pay a royalty or percentage back to Starbucks for the use of its business space.
Since the locations are run by the retailers, the coffee shop experiences have not been consistent according to Starbucks Chief Marketing Officer Brady Brewer. Changes are being made to make the customer experience equivalent to that of franchise and corporate locations in the US.
Starbucks gives you free coffee
Regular Starbucks customers have enjoyed the Starbucks loyalty program since its launch in 2008. Originally called Starbucks Card Rewards before becoming My Starbucks Rewards in 2009, it allows customers to earn Starbucks Stars (the chain’s version of points) for free drinks, extras, and food items. Rewards customers can get free refills on brewed coffee and tea. Customers who sign up for rewards also receive a free birthday treat each year.
Starbucks Stars are earned by earning two stars for every dollar spent at participating Starbucks locations, either through the Starbucks phone app or by using a Starbucks gift card registered to earn stars. Any purchase of Starbucks brands such as K-cups, instant coffee drinks or other prepackaged products that have a Stars code also count. Stars can be added to your customer rewards account by scanning your receipt with the Starbucks app.
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Target, Kroger Getting the full Starbucks experience
While customers could clearly enjoy a fresh cup of joe from Starbucks while shopping through Target and Kroger, there was a problem with the system — those locations use the point-of-sale system of the stores they reside in rather than the native system Starbucks.
This means that many Starbucks locations inside these stores were unable to allow customers to use their rewards points or place orders ahead of time using the Starbucks app. This has been a pain point for customers looking 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 Sept. 13 in Seattle, saying the experience customers had at licensed locations was “inconsistent.”
To solve the problem, Starbucks will roll out a new program called Starbucks Connect at licensed locations so customers can enjoy their Rewards benefits.
“Both mobile rewards and ordering have become core to the business in recent years, with accelerated growth during the pandemic,” Brewer said.