Starbucks is not about the coffee
BusinessWeek recently ran a piece titled How To Reenergize Starbucks, which addresses the return of Howard Schultz to help Starbucks reclaim its original spirit. The story solicited commentary for a stable of design+business folks, whose responses I found disappointing.
The folks at hipster coffeehouse Ritual Roasters dressed up as Starbucks Zombies for Halloween. Flickr link.
(The following is a combination of ideas/concepts from me and Brandon)
Starbucks is a company we think about at Adaptive Path, as it’s success was very much built on its experience design. We use Starbucks to explain the experience strategy tool of the Elevator Pitch:
For people who have 15 minutes to spend on themselves, Starbucks is a familiar social experience that brings comfort, reliability, and enjoyment to the everyday coffee-drinking routine.
Unlike other habits, rituals, and indulgences, Starbucks consistently delivers your day’s best break as a personal experience wherever or whenever you need it.
As such, unlike many in that BusinessWeek article, I don’t think it’s about The Coffee. Starbucks has to deliver a basically good product, but they don’t need to deliver a superlative product. And they definitely don’t need to sell $1 coffee—that sends exactly the wrong message, in that it moves Starbucks to the bottom of the pyramid, and turns them simply into a volume operation.
What they need to do is make the store experience inviting, not so much about pushing product, but about being that Third Place (not home or work) where people can get a respite.
“Welcome To The Third Place”, an image from a Starbucks in Australia. Flickr Link.
Starbucks needs to engage with The Long Wow. The need to assess their touchpoints for delivery—The retail environment (including music, smell, etc.), the staff and service protocol, the beverages/food, the packaging, the wifi, the streetscape (where and how it fits into the neighborhood), etc.
They need to reconsider their customers’ needs (which may have evolved since they first opened). What do you need at a third place other than a drink or a light snack? You might need a private place to chat (think bench in a park), a good place to read/study (think library), or a place for casual conversation (think bar). There’s still plenty of room in which to sell services or product, but it’s clearly not about feeling more like a shopping mall.
Approaches to consider:
+ Allow the stores more control over how they engage with their community. This is the Whole Foods model. Each Whole Foods store has a high degree of autonomy for fitting within their community. Whole Foods has been able to grow, yet still achieve that “transformative” quality for their customers, and I think this is key.
+ Take advantage of the fact of real estate. Apple Stores’ success hinges on recognizing that in a physical environment, you can have a remarkable set of high-touch interactions, with merchandise and other people, that can really elevate your experience. Apple uses their stores physical-ness for classes, genius bar, lengthy trials of the products, and, to a certain degree, a cool place to hang out. Starbucks could benefit from such a mindset, with things such as book clubs and other affinity groups. Starbucks could reach out to its community and serve as a hub/meeting place for such things.
+ Let employees and service designers play with the service protocol; today, you order a coffee and pick it up a few seconds later. Nothing special or unusual ever happens during the service. Employees don’t have the means to delight or surprise a customer, or just make a customer smile. Their “cheer-chain” was a poorly handled PR stunt, but it illustrates that delightful variations in service make for a good break. It just has to be genuine, which means from the initiative of staff and not from the corporate playbook.
To finish, It would be marvelous to see Starbucks manage and operate based on experiences. They should own:
- the morning stop on the way to work
- the private chat
- the study cram session
- killing time before your meeting/date/etc.
- and keep identifying more while re-inventing the ones that have grown tired
And each store should know which of these experiences they support, and identify which customers are looking for which experience and support them in it.
There are 14 comments on this idea.
Its been interesting to watch Pacific Coffee - http://www.pacificcoffee.com/eng/home.php - compete against Starbucks in Hong Kong and watch what they have been doing with their retail spaces.
There is a fun Pacific Coffee shop in a shopping mall called “Festival Walk” in Kowloon Tong, close to a University, where they have provided a book shelf full of books, desks for students to study with lamps, PCs for internet access, Wifi access (not free), flat screen TVs to watch the news and game machines for kids to play.
It much, much more than drinking coffee - its a home away from home in a city where space matters :)
I’m not a coffee drinker, but I use Starbucks sites a lot. I “pay” for my use of their site by purchasing a slice of banana bread. So, absolutely, it’s not about the coffee. You could imagine a set of reasons why people use Starbucks sites:
- stop on the way to work to wake up in the morning
- take a business discussion offline, over a coffee break
- feed my snack craving
- work, but feel like I have companionship (rather than working alone at
home)
- conduct a meeting with business associate (conference room w/out walls)
- chat privately with a friend
- cram for a test
- study, possibly meet other students studying the same thing
- kill time before my meeting, reading
- talk about a movie I just saw with companions/others around me
- find out what’s going on in this little part of the neighborhood
Sorry guys, but it is fundamentally about the quality of the product. The examples that you cite all have that in common. Whole Foods has great food, Ritual has great coffee and Apple makes great computers. The thing that the larger brands do well is create an environment in which the perception of the quality of their products is accentuated. Right now I get the impression that Starbucks is about selling me cds and mugs, not coffee. They have done a great job of telling me through their over merchandised, production line store environments that they don’t care about what I am there for, which is the drink. And that’s where the experience breaks down. Refocus the experience around the drink, which is the thing that made your 15 minutes nice in the first place.
I tend to prefer thinking of coffee shops as a intellectual and social centerpoint, no matter how well they all perform that individually, or how good the actual coffee is (though, admittedly, that’s why I’d visit your shop instead of the others).
I would love to see the term Pub come back into existence as a Public House where the community comes to share ideas and snacks, beer, coffee, what have you. Of course there are limitations, but i have limitations on how many strip malls I stop at for inspiration (== none).
I want Starbucks and the others to be social coffee shops but there are more product stands that cramp my style than I’m ready to cope with.
Excuse me…
Great article.
It’s a well known fact that Dunkin Donuts is taking a HUGE percent of the Starbucks profit away, but they don’t embody any of what you are suggesting. They market to the everyman with price and controlled vocabularies and succeed doing it.
I can see that Starbucks doesn’t need or want to be Dunkin Donuts, but outside of cities like NYC, San Fran, Chicago, etc. is there a need for place to hang out?
I lived in the midwest, I drove everywhere. Starbucks was not a unplanned stop.
I suspect the market is saturated and outside of big cities they should just be a nice coffee shop..
It may be a mistake to separate the coffee from the experience. The coffee is indeed part of the experience that if removed would make Starbucks a very different experience. If working to improve the Starbucks experience, understanding the role of quality coffee should certainly be examined. I would be wary to say that Starbucks is not about the coffee. But it is true that Starbucks is not only about the coffee.
It may also be useful to recognize the different goals customers have: end goals (get coffee), experience goals (feel unique: double tall sugar-free hazelnut latte), life goals (only have the best).
Does anyone _really_ hang out at the Apple Store? The parallels drawn to the Apple store don’t extend to Starbucks.
Apple has a “cool” halo around it, Starbucks does not, and should not. I think your overall point is correct (obviously) focus on the total experience, of which, a good (not superlative) cuppa joe is just a part of that.
I would say they already mastered the art of a controlled experience. Starbuck in China, of which I’ve visited about 5, is surprising how well they have mastered a controlled experience that is identical store to store.
The parallel you should be drawing to Apple is… How does Starbucks keep their experience fresh and exciting? The comparison is flawed ultimately because Apple has freshness and excitement merely because they can announce new or revised products nearly every month. Starbucks cannot.
“And they need to do…” do they? Do we think that Starbucks is a failure or a resounding success?
When did the switch happen? When the stock price fell? When targets expected by industry analysts are not inline with actual? Let’s face it, Starbucks is massively successful and sure they need some tweaking which is a byproduct of _any large multi-national_ company.
Everyone’s product could be better. I don’t really get where Starbucks needs to get a lot better than other enterprises (like Peoplesoft’s horrendous apps)
Starbucks recently announced a switch from T-Mobile to AT&T for WiFi service in their stores. The brilliance of this change is the 2 free hours of wireless access. Why? The free WiFi is for starbucks card holders only. This isn’t the credit card, this is the refillable card used to purchase a cup of Joe.
Think about it. Everyone now has a free wireless hotspot within close proximity to work and home (Starbucks stores are everywhere). All they need is a membership card. The barrier to getting one of these cards is minimal: put a few bucks on it and use it whenever or never. Now Starbucks has put a piece of plastic in everyone’s wallet with their logo. Visa is probably the only other company to claim that.
Maybe the next step would be to ensure that everyone drinks from a Starbucks travel mug. Follow in Whole Foods footsteps and initiate a green campaign to limit the use of paper cups and give free cups to customers along with incentives to use them frequently.
A good read and relevant to the discussion—“Call that kawfee? New York embraces better brew”—http://www.theage.com.au/news/united-states/you-call-that-kawfee/2008/04/15/1208025165086.html
The first pic is really funny, but kinda mad as well. Back to the topic: I totally agree to Jasmin. The costumer isn´t only buying a cup of something to drink, but an expierence. Furthermore for some people it is a life-style. The difficulty lies in the strategic direction starbucks is aiming on. Do they want to cook coffee for the masses, do they want to give a noble experiences with maybe a lounge for business clients oder do they want to further stuck in the middle, which makes it even more difficult to generate acceptable turn-over?
That first picture is funny
I don’t know if anyone mentioned seeing and being seen. Starbucks offers a stage for singles to project their unique persona, show their stuff and—ultimately—to meet others. The coffee is just a prop in that case. Useful but it could just as well be something else. Banana bread for example.
The parallel to Whole Foods and the comment from Jamin re: customer “end goals” seems paramount. While Whole Foods is actually extremely standardized in terms of food production, flavor, products, etc. each store appears pretty unique to the customer. Likewise starbucks has been smart about cornering the drive-thru luxury market in the suburbs—placing stores strategically near McDonald’s and Panera. It seems that Starbucks should employ a different “feel” to each store depending on the clientele, while maintaining a high level of quality in the coffee and food products (upon which they could improve drastically).
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