Dive Brief:

• As companies experiment with cashierless checkouts, Starbucks and Amazon teamed up to open a Starbucks Pickup with Amazon Go in New York City on Thursday, according to a press release. The two plan to open more stores in 2022, starting with another location at The New York Times Building in New York City. 
• The new store offers the full Starbucks menu and a curated selection of food and beverages in the Amazon Go market, including salads, sandwiches, bakery items and snacks. The location also features a lounge with individual workspaces and expanded tables with power outlets and USB ports. 
• Customers can use the Starbucks app to order ahead. Once in the store, they can find the status of their order on a digital screen and pick it up. To enter the Amazon Go market and lounge, customers can use the "in-store code" on the Amazon shopping app, Amazon One or a credit card. Once in the store, shoppers can take products, which will then be automatically added to their virtual cart. When a customer leaves the Amazon Go market their card will then be charged and they can access their receipt "within a few hours," according to the company. 

Dive Insight:

Starbucks and Amazon's new concept comes as retail has grown more accustomed to cashierless stores, especially with a pandemic that made customers wary of physical contact. 

Just before the pandemic caused states to issue shelter-in-place orders in mid-March 2020, Amazon began selling its cashierless technology for other retailers to use. Travel convenience store retailer Hudson announced plans earlier this year to implement Amazon's Just Walk Out technology at the Dallas Love Field Airport and other locations. 

"The new Starbucks Pickup with Amazon Go is designed to provide our customers with an experience that delivers convenience and connection in an effortless way," Katie Young, senior vice president of global growth and development at Starbucks, said. "Our goal with this new store concept is to give our customers the ability to choose which experience is right for them as they go through their day, whether it is utilizing the Starbucks and Amazon apps to purchase food and beverages on the go, or deciding to stay in the lounge for the traditional third place experience Starbucks is known for."

Amazon has also been working to marry its technology with its grocery banners. Whole Foods Market announced in September plans to open two stores next year equipped with Just Walk Out. In June, an Amazon Fresh store in Bellevue, Washington, became the first full-size supermarket in the chain to feature the technology. 

Research suggests that consumers are interested in cashierless options in stores, but the customer experience needs improvement. A 2020 report from USA Technologies and PYMNTS.com said that over a third of customers found unattended retail options appealing because of their shorter lines, and a third said the option lets them make purchases without talking with staffers. Yet, dissatisfied consumers reported that they felt unattended terminals were hard to use and they did not trust the systems to charge them the correct amount, according to the report. 

For Starbucks, the move comes amid a unionization effort among its staffers and a widespread worker shortage that has hit the restaurant industry particularly hard. The company was accused of union busting tactics in a National Labor Relations Board complaint filed earlier this month. And, like other major companies, Starbucks increased its minimum wage to $15 per hour to attract workers.