I walked through my local Starbucks yesterday to see what they'd done with their recent renovations. Kind of hoping it might be a more suitable location for a business talk than it was before. Sadly, there are now fewer seats overall, and the customer space is quite a bit smaller. The counter is bigger, so the staff are likely happy. I have to assume that they're focusing this location on the takeout business, which may actually be a good decision, despite my dissatisfaction.
And therein lies the Starbuckian challenge.
They aren't unique anymore, they're not rare. They are convenient. They are, frankly, mass. Premium mass perhaps, but mass all the same.
In one of the emerging neighborhoods here, Leslieville, I saw a number of unique coffee houses one day. That's Tango Palace Coffee Company at the top of the page. The Dark Horse Espresso Bar was down the street a ways.
And Red Rocket Coffee, above, was not far from the streetcar depot, home of the transportation locally known as The Red Rocket.
This is what local looks like. I expect each of these places has a loyal following, their own strengths and weaknesses, some unique blends of coffee, and perhaps some fresh baked goods.
By comparison, Starbucks has become the Holiday Inn of coffee places -- it may not be special, but there won't be many surprises.
Despite their iconic status, Starbucks has some big challenges. Not the least of which is sheer size. There's no avoiding this once you go public, however. There's no joy in being a utility -- all the money goes to the growth stocks, and that's what Starbucks became. Their recent decision to close some outlets likely makes a lot of sense.
Now what?
In today's marketplace, you can be budget-bargain or you can be high-end. You can stand for indulgence, or you can stand for the environment, or you can stand for being the smart decision, or many other positions. The mushy middle is a tough place to compete, however.
So what does Starbucks stand for right now, what is the brand meaning? And how does the experience reflect this meaning, reinforce this meaning, and bring this meaning to life?
Starbucks can thrive, but there's no way it keeps its premium price point unless it keeps its game up. So re-examining their coffee taste is a good idea. McDonald's has improved their coffee taste. The donut places are still serving good coffee. And together, these define the budget end of good coffee. Starbucks has to stay above this in the minds of consumers, and they have to earn their premium price. I hear people say it's the best coffee in the world, but I find this hard to believe, and it certainly doesn't mesh with my own experience.
The third-place thing is definitely still working for them -- at least where you can find a place to sit.
I think they might try to customize their focus for each local market, wherever they can. So that locations in business districts have more places for quick meetings, and locations in neighborhoods are friendly to SUV strollers. [I've never understood why they don't have stroller parking of some sort to end the congestion, or designated seating, or something like that]. Customizing to be local within a consistent larger theme could mean that you get to know individual locations that suit your preferences. For me, I'd avoid the SUV locations, and head straight to the business and artsie ones.
Where they hang the work of local artists, this seems like a good thing to me. It helps them preserve a sense of place. Doing this takes time and effort, however, and staff need to be given a mandate to spend the time and make the effort.
One thing they could definitely improve is their food product. This stuff tastes like it was shipped in bulk from a single factory, and has been on the shelf for days. Especially since we are seeing the rise of local bakeries and patisseries again, that offer the real deal.
Resources:
For more on the challenge of running public companies check out this story by Miro Slodki, Is it time we fired our shareholders?
I've written about the coffee business before.
Cafe, Coffee Place, Coffee House: names and their meanings
Far Coast: Coca-Cola pilot coffee cafe in Toronto
Getting a good coffee in Kingston Jamaica and other third place observations
Becky Carroll has run quite a few posts on the Starbucks experience on the Customers Rock blog. As has Meikah Ybañez-Delid on the CustServ blog.
