Starbucks Brews Up Online Delivery Deal

Specialty coffee retailer Starbucks Coffee Co., Seattle, has forged a multimillion dollar marketing deal with Kozmo.com, which bills itself as "the world's first on-demand Internet-to-door delivery service." Under the terms of the five-year agreement, Starbucks will receive $150 million from Kozmo.com for in-store exposure and co-marketing opportunities.

     Kozmo.com allows users to order convenience and personal care products over the Web for delivery, and with this deal, it will add a selection of Starbucks "coffee-by-the-pound," Tazo teas and accessory products to its menu. Kozmo.com also will place drop boxes for the return of video and other items in Starbucks stores in the cities where Kozmo.com operates, which now include New York, Boston, Washington, D.C., Seattle and San Francisco. Other possible opportunities include delivering hot beverages, say the companies.

     The relationship will help drive Kozmo.com's planned expansion into new markets nationwide, the company says. Its hopes that its presence in the stores will enable the Kozmo.com brand to become more quickly accepted by consumers.