The Starbucks Saga - Catnip for Experience Designers
by petermeThose of us interested in experience strategy and design are attracted to the retail industry like a moth to a flame. The successful retail experience requires a coordination of remarkable complexity. Online, you’ve got e-commerce, and it’s needs to address usability, desirability, and findability, and to overcome concerns about trust, security, and privacy. Offline, you’ve got the design of the in-store experience, including the interior architecture and wayfinding, interaction with staff, activities that the store supports, oh, right, and the products that are the reason you’re there. And, increasingly, there’s the hand-offs between the online and offline channels, currently limited to things “in-store pickup” of items purchased online.
This is a big hairy problem, one that requires analytical and visceral thinking and making, where you have to appeal to the head, heart, and stomach of the customer. This is what makes the Starbucks Saga so interesting to follow. It began early last year with a memo sent from then-chairman Howard Schultz to then-CEO Jim Donald about the commoditization of the Starbucks experience.
Then, Schultz stepped back in to run Starbucks. I blogged that the Starbucks Experience is not about the coffee, though many disagreed with me.
In a press release issued after Starbucks annual meeting with shareholders, Schultz makes clear that customer experience is the paramount concern: “By embracing our heritage, returning to our core — all things coffee — and our relentless commitment to innovation, we will reignite the emotional connection we have with our customers and transform the Starbucks Experience.”
I find that press release fascinating. When the CEO of a multi-billion dollar organization goes on and on about experience, well, it bodes well for us who feel that designing for experience is crucial to success.
Most recently, of course, has been news of Starbucks’ imminent store closures. The best commentary which can be found here:
I would love to get my hands on the redesign of the Starbucks Experience. It makes you wonder if they’ve done any design research, shop-alongs with Starbucks customers, or simple observation of what goes on in the store. And whether there’s a lab somewhere, with people sketching concepts for different store layouts and store offerings. And if they’re thinking seriously about how to tie the online and offline experience with some stronger than a “store locator” on Starbucks.com. Retail is ripe ripe ripe for radical transformation, and Starbucks would make a fascinating case study.
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July 25th, 2008 at 10:11 am
See also “The Starbucks Experience”.
July 26th, 2008 at 8:37 pm
What other industries are crying out for a revamped user/customer experience? Airlines? Other?
July 26th, 2008 at 8:54 pm
Well… maybe… kinda sorta. Wireless was a big deal for Starbucks, remember? In fact, when they opened it was the only reason I went. But now everyone has wireless access, from the Mom & Pop to the corporate competitors. Then there’s the Mom & Pop market which tends to be closer: private owners who run successful (and even less than successful) coffee shops give a place personality - something Starbucks has lacked. When I lived in Florida, my group would float between coffee shops - maybe today we’re feeling like dealing with one personality, another day another, and so on. Or maybe there’s an open mic to go to/avoid. Maybe there’s an art show. A birthday party. Or maybe it’s that cute non-pretentious woman who keeps showing up and staring at the board games. Coffee is never about coffee. Never has been, never will be.
Options. Starbucks is just… Starbucks. It’s bland, requiring you to add your own personality to it for it to be successful. Book stores often have their own coffee shops in them now, due mainly to Barnes & Noble as well as Borders, they have wireless and they have books. I wonder if the demographic of people who go to Starbucks are well read? There’s something to consider: maybe Starbucks and Amazon.com need a merger.
July 27th, 2008 at 5:24 pm
For a real “radical transformation in retail”, other than that offered by marketing types, consider http://www.starbucksunion.org/ .
July 31st, 2008 at 1:37 pm
This post really got me thinking.
First off, a bit of deconstruction is in order: I think there is an underlying assumption that if Schultz talks about the “Starbucks experience” and “returning to our core” what he really means is, “Let’s go back to what drove our phenomenal growth in order to get more growth” In other words, he only wants to deliver experience that is in the service of growth. I am not sure that ideal customer experience and growth always go hand-in-hand, especially if you are Starbucks in July of 2008. The complexity of what it actually means for Starbucks to deliver a great in-store experience is what will make it near-impossible for them to succeed. To do it they will need to fight: Their history, their shareholders, the sources of much of their current revenue.
Here is why:
Starbucks’ fortunes rose on a near military-style focus on uniformity – a great café with a great cup of coffee all across the U.S. Then it expanded profits by introducing higher margin junk food options (I am sorry but a “Mint Chocolaty Chip Frappuccino” with a pre-packaged sandwich can’t be what Howard Schultz means when he says “returning to our core…all things coffee”). After junk food, Starbucks brought music (not local but mass market) and convenience store products (gum, breath mints and fancy versions of the candy bar) into the experience to keep growth going… The very products Starbucks now sells diminish the experience into generic “retail” when Starbucks initially succeeded by creating a sense of a hangout, a café. It was never retail in the way that Best Buy is retail. It was a cafe!
From a business perspective Starbuck’s faces stark choices if they want to reorganize around “experience”. (1)They have a business model that no longer remotely resembles a café (and will make any experience design problematic because what if the experience is improved by getting rid of 40% of the merchandise and narrowing the “all things coffee” options? What board is going to agree to that?). (2)They have a very corporate culture and (3) a huge workforce trained by the previous regime. They can’t imagine the experience from scratch in other words - they must work from what they already have. Finally, who says that one customer’s experience in Duluth is what customers want in San Francisco or Orlando? The idea of a pan-world Starbucks experience is probably off-target to begin with…
August 1st, 2008 at 11:30 am
Joshua–
That’s a lot to chew on. It’s interesting to compare Starbuck’s very top-down approach to the experience to what Biggby Coffee does, as explained on Bruce Temkin’s excellent Customer Experience Matters blog
http://experiencematters.wordpress.com/2008/07/25/biggby-coffee-takes-on-starbucks/
August 3rd, 2008 at 2:43 am
“Multinational corporations actually have to offer something better than the local alternatives if they want to succeed.” — http://www.theage.com.au/opinion/memo-starbucks-next-time-try-selling-ice-to-eskimos-20080802-3oyp.html