It’s neither. But they’re successful because of the user experience — consistency, the preloaded cards, the mobile ordering with notifications when your order is ready.

They build whatever hardware (in store) or software (mobile / back end) is necessary to give the user experience they want.

But you’re absolutely right — we can lump their mediocre coffee into hardware, or call it “goods” as a third category that you also don’t have to be the best at if you’re a UX company.