Monday, 25 January 2010

Is Starbucks chucking away its identity?

It’s been tough for the coffee shops in this past year of recession. You don’t need to be Einstein to realise that a £2.50 latte is one of the first things to go when tightening your belt.

However the biggest chain in the world Starbucks has posted better results than expected. In the U.S. home market, Via is cited as taking the credit for this.

What is Via I hear you ask? It’s instant coffee. Yes instant.

Isn’t this just defeating the whole object of Starbuck, making real coffee?

It’s one of those brand stretch ideas that just stretches the wrong way. It clashes with the brand identity. It might have contributed financially in the short term but I would advise concentrating on far better ideas that DO fit into the brand, such as packaged beans and new drinks such as bottled lattes Of course the company needs growth and this can’t just come from store openings but it’s got to be the right sort of growth and takes share of customer purse. If you are a real coffee lover, you’re not going to go for instant.

Another idea Starbuck has got for growth is the opening of a new concept store, the Coffee and Tea store. Thanks to trend hunter for this.

It’s supposed to be more individual, more local, more rustic sort of coffee house, stocking a range of coffee and teas that the mainstream stores can’t offer.

I have got mixed feelings about this. As a speciality coffee shop, Starbucks can’t exist on a large scale. It has to be standardised, not all staff can be passionate baristas and some types of specialty coffee can’t be provided to 15 000 stores. So I can see why an offshoot store might make sense to provide new products, test them out and attract a new customer segment that won’t go the big corporate store.

However I cringe when Starbucks describes the concept.

“Coffee & Tea offers customers new opportunities for discovery, a high level of interaction and a deep connection to the local community.”

Sorry – what?.

“Customers can participate in and enjoy musical performances and poetry readings; they can also bring in their favorite LPs to play on the sound system”

Can any one find an LP? Isn’t this a bit hippy nonsense?

“This coffeehouse design is …. eclectic and raw, featuring locally sourced and reused materials that are one-of-a-kind.”

Eclectic and raw? Pleeease.

“Materials sourced from existing Starbucks locations: floor and ceiling are original; bar top and doors were repurposed from the Seattle University Village store prior to its renovation; chairs were sourced from area Starbucks stores and refinished; and chalkboard frames were made using shipping pallets from the Starbucks Support Center in Seattle”

I actually do like this bit. Grabbing bits of old Starbucks and making them into the new store. One thing though that strikes me after reading all this: is it a Starbucks coffee shop, yes or no?

I think there is some brand confusion here. The stock market is demanding growth and of course Schultz needs to deliver. However the growth strategies need to be well thought out and should look at share of customer purse rather than store openings or new customers.

What things can we sell to the existing customers who are coming inside the door? Think of that massive footfall and how to make the most of that? What other products and services can a coffee shop sell? As well as the bottled take away drinks and beans as mentioned, what about gaming? Newspapers? Books?, Coffee courses?

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