The way people signal they are intelligent and sophisticated changes over time. Starbucks is still fine for 6am before the train, but you'd never take a first date there; it would send the wrong signals.
The way they are tackling this problem is all wrong though. Even if they had unlimited amounts of money, they still wouldn't be able hire enough people with good taste to create a different culture at each location. All they can do is rearrange the furniture a little, and people are too smart for that.
The biggest asset Starbucks has going for it is that when you walk in there, they actually make your coffee as opposed to glaring at you and going back to reading their book. What if instead of trying to hide their biggest assets, they actually leveraged them to become like Reddit for food. That is, they'd showcase local culinary talent and various new and interesting niche beverages. But at the same time there would be a certain consistency in the atmosphere, culture, and service.
This strikes me as the ideal because you could attract people with both high and low openness to experience and neuroticism. And thanks to technology you could do it without needing to identify/hire lots of people with great taste, which is basically impossible at that scale.
"The biggest asset Starbucks has going for it is that when you walk in there, they actually make your coffee as opposed to glaring at you and going back to reading their book."
Which is exactly why I started going to the new 'Cryptobucks' mentioned in the article instead of the independent coffee shop across the street from them... That, and the coffee at the Roy St Starbucks is simply better.
If you are looking for a quality coffee, I would walk the extra block to Vivace. If you are looking for convenience, I agree that friendliest baristas is probably the deciding factor.
My girlfriend is bizarrely obsessed with drip coffee and lives at 700 Broadway East (i.e. literally above Roy St. Coffee). For some reason, she doesn't like espresso. I agree Vivace is better.
15 years ago in the UK, very few people had any interest in coffee at all. Starbucks became fashionable, and people started to think about it - and realised that SB coffee is merely OK, and poor value. It took about 10 years, but SB has become McDonald's in the mind of the middle class and is now dominated by teenagers and students. Adults tend to go somewhere more...sophisticated? Somewhere that serves Illy coffee. Definitely somewhere without the gaggle of teenage girls.
The only time I personally visit starbucks is when I am somewhere abroad and want somewhere familiar for 30 minutes. This means city centres work well, but not necessarily outlets in smaller communities.
SB may be better served by 'sponsoring' independents rather than running their own shops, if they're looking to divorce themselves from the brand. Work with smaller coffee shops, act as a distributor and consultant service for a cut of the profits. They'd mitigate the risk of opening a coffee shop for a first-timer and have a clean break between the 'sophisticated' consumer and the brand.
Maybe what people say they want is different from what they want. They might say they want to eat healthy and still stop by McDonalds on a regular basis.
INC did an interview with Markus Frind where he talked about not necessarily trusting what his users wanted when it came to partners. He's got an algorithm that suggests people for matches even if they said they wouldn't be interested in the person:
... if you tell Plenty of Fish you want to date blond nonsmokers but spend all your time gawking at nicotine-addled brunettes, the program will adjust
... if you tell Plenty of Fish you want to date blond
nonsmokers but spend all your time gawking at
nicotine-addled brunettes, the program will adjust
Of course, if your business model was affiliate links to other sites, when they didn't find what they wanted on your site, such an algorithm would also be good;
Saying you despise Starbucks gets you anti-corporate kudos. Buying coffee in Starbucks gets you expensive but tasty coffee, well made by practised staff. Hypocrisy is a win-win.
I wouldn't quite say it's made by "practiced staff." The espresso made at most Starbucks is at the push of a button, hardly requiring effort, the rest is only a memorization of ingredients. It's turned into a bit of a ford/mcdonalds assembly line.
Or maybe a "stealth" Starbucks isn't really that stealth in this day and age. I read about the 15th Street coffee shop before it even opened ... and I don't live in Seattle.
Every other old, tired company is trying to re-brand itself to be hip ... huge studios back "indie" films ... conglomerates buy the cool clothing company
Starbucks has always seemed self-defeating to me. The original goal was to introduce coffee art to a consumer culture that was, at the time, fixated on Folger's. They've succeeded in moving people to believe that there's a lot more to coffee which has seriously expanded the market for the kind of high-craft coffee possible at smaller, non-franchise shops. Today, Starbucks doesn't really have the brand to move into that niche, everyone knows their secret is just sugar and milk, so they need to stealthily make inroads.
Unfortunately, at the end of the day, franchise and craft don't go together that well.
I remember reading an article about a certain kind of highly engineered coffee maker. It combined the grinder, water heater, mixer, and press all into one and thus turned perfect coffee into an exactly repeatable formula. A trained operator can never fail to please and Starbucks bought the company hoping to put one of those devices in every franchise and revolutionize the availability of the "perfect cup".
In pilots the baristas still fill them with stale beans.
I actually wasn't aware of that. It's an interesting business structure, but I think at the end of the day it is only going to bring a small improvement to the atmosphere.
Is this trend generally true of large brands, or is it specific to the Starbucks brand? Starbucks was somewhat a victim of their own success, in that their rapid, headline-making expansion gave their brand shades of "corporate drone" and "cookie-cutter" and suchlike in the popular culture. In the current economic climate it's not surprising that people would reject large brands in favor of local producers, but I would expect that to be a more industry-specific tokenism that a general consumer shift.
On the other hand, if the non-branded stores aren't succeeding either, maybe the coffee's just bad.
That would be my guess, too, assuming that customers can't otherwise tell the difference between real non-Starbucks stores and the fake non-Starbucks stores. A Consumer Reports taste test in 2007 placed Starbucks's coffee behind McDonald's, with a mixed followup review in 2009:
> Consumer Reports taste test in 2007 placed Starbucks's coffee behind McDonald's
Starbucks had consistently above average coffee at all of their stores at a time when it was hard to get above average coffee consistently. Since then, a number of places have offered good coffee - McDonalds isn't prestigious at all, but they now serve Newman's Own which is quite good. Subway serves Seattle's Best, so during busy times when the coffee isn't old and burnt, that's good. Heck, 7-11 has pretty good coffee these days. I prefer all three of those to Starbucks for plain coffee. Starbucks does make a good Americano though, and I don't drink the fancy mixed coffee drinks so much, but my fancy coffee drinking friends say Starbucks does it pretty well.
These days, it's not hard to get a cup of pretty good black coffee in a lot of different stores in the USA. Still, Starbucks is usually playing the Beatles or classical music, has a comfortable enough ambiance, and employees who are pretty happy and friendly. So I'll grab a cup of joe to run from Subway or McDonalds or 7-11, but if I'm going to sit down and read a book, I'll lean towards Starbucks. That's what they've got these days - their regular ol' coffee isn't anything special.
For the sake of everyone reading along from other parts of the country, it bears mentioning that the street containing the first non-Starbucks Starbucks ('Cryptobucks') is jam-packed with coffee shops: http://www.google.com/maps?f=q&source=s_q&hl=en&...
I'm a little perplexed by the report that the 15th Ave Coffee and Tea is doing so poorly since their store is constantly packed with people. The only thing I can imagine is that your typical Starbucks does the lion's share of its business on the strength of 'to go' orders, which the new Cryptobucks locations are expressly designed to minimize.
The coffee at the new places is definitely better than your average Starbucks, in any case. It's also better than a fair number of independent coffee shops in the same vicinity.
I think the problem is that Starbucks just had bad luck with their clientele. Seems to me coffee drinkers are more likely to value a unique experience over homogeneous reliability.
I prefer both, but it depends on where I am. I prefer one-off shops or Tully's normally; but I have to say that Starbucks provides a slightly classier version of McDonald's reliability overseas. While traveling, I could easily find a Starbucks in a new city and get a mocha which, while not the best ever, was at least consistent enough to count as a taste of home (not to mention I now have a collection of I've-been-there mugs :)).
There's a book titled "McDonaldsization" that deals with this exact theme: the selling point of McDonalds et al is the consistency and familiarity. The chapters dealing with McDonalds specifically are pretty interesting, although when it starts extending that as a metaphor for globalization, if you disagree with the premise it won't convince you of much.
Hamburgers and french fries are a good example of where this is a good quality to have, more so than most food. Coffee is less so, especially for coffee snobs, but for people who need their morning fix all that's required is caffinated liquid marginally below your gag reflex threshold, which starbucks can usually manage. But, however just because standardization works for the _coffee_ part of a coffee shop, it doesn't work for the _shop_ part of it. The idea of a "coffee shop" is much much larger than a shop that vends coffee, and that bohemian ideal is not so amenable to industrialized standardization in the same manner as burger patties.
Yeah I agree, why risk eating exotic food which you have to look up in wikipedia to know what's in them when you can eat a good'ol big mac with coke and fries!
</sarcasm>
Familiar food can be a comfort when you've been eating unfamiliar food for days. But yeah, if that's all you eat when traveling, you're doing it wrong.
Not sure why everyone thinks that Starbucks is taking this step from a position of weakness. As far as business is concerned, I think it's a good strategic move for them to explore this growth channel regardless of their brand's strength. Many other companies have a successful strategy involving both private label and branded products.
Amazon Shoes Category vs Endless.com (vs Zappos.com)
Essentials Baking Co. vs Trader Joe's bread (in Seattle)
My theory of the fall of Starbucks is that this is just one instance of a trend I refer to as "The Conspicuous Consumption of Knowledge". In this case, knowledge of the locale is a point of pride, customers of independent coffee shops know more about the places they frequent, and they know it better than anyone else, and can impress their friends by introducing the wonderful little place that they have found. But you see the same trend manifesting in other ways as well; whether it's knowing the right shoes, to renewably sourced power; it's what the customers know, or think they know, that makes or breaks the experience. And much of the time, they want to know these details so that they can display their knowledge in social situations.
The article was thin on facts and read like wishful thinking. The key piece of info was that the unbranded stores had 1/3 the traffic of branded stores. From this the author concludes that people dislike the Starbucks brand? I would have thought the opposite!!!!
I agree. The author has an interesting theory, but he needs to dig up some real facts to support it.
As you point out, his solidest fact undermines his theory.
I wonder if there is a "brand backlash"? And if it's temporary, and linked to the recession? I think that within an individual's life, the power of brands goes down over time. Maybe as the author and his friends get older, they are feeling less compulsion from brands?
Where I'm from (Rural north east US) StarBucks did a horrible job adapting to local coffee tradition. They were trying to create a market for more exotic coffee drinks that simply aren't in demand here. The preferred choice for most people is donut or bagel + coffee and usually via drive through. StarBucks failed to educate customers here they offered regular ole' coffee at a reasonable price. Everyone assumed it was $5 drinks. (and they had to stop down the road at a competing chain to get their precious Boston Creme donut or Everything bagel) I believe we had about half a dozen StarBucks within a 50 mile radius at one point and there are maybe 2 left now.
Every winning strategy is repeated and expanded until the point where it becomes a losing strategy. (A little longer, even , because there is a momentum around the expansion phase, and recognizing the returns have swung negative is not immediate.)
This has always been true.
What may be new is the pace: a winning formula can be taken nationwide, netwide, worldwide faster than ever before. So it also reaches its points of diminishing returns and rising countermeasures sooner. The utter dominance of the Starbucks model can be followed almost immediately by its exhaustion.
It seems that the trend is that people are becoming very anti-corporation or large corporations for that matter, put up a store like trader joe's people will beg and plead for more but now large towns that don't yet have a superwalmart will beg and plead for them not to build and even stop them from building through the government.
Though it does depend on the town, that specific example usually works together.
> Landsdowne never got a Starbucks, but Benicia, California and a lot of other towns got plenty of Starbucks.
In New Delhi, there are often two or three Café Coffee Day outlets located a couple of meters away from each other. Strangely enough, they're all mostly full.
Oh, and McDonald's. There's a McDonald's everywhere.
I really don't think this says anything about branding. It says people don't want shitty coffee, and that they recognize shitty coffee whether or not it has a Starbucks logo on it.
The way they are tackling this problem is all wrong though. Even if they had unlimited amounts of money, they still wouldn't be able hire enough people with good taste to create a different culture at each location. All they can do is rearrange the furniture a little, and people are too smart for that.
The biggest asset Starbucks has going for it is that when you walk in there, they actually make your coffee as opposed to glaring at you and going back to reading their book. What if instead of trying to hide their biggest assets, they actually leveraged them to become like Reddit for food. That is, they'd showcase local culinary talent and various new and interesting niche beverages. But at the same time there would be a certain consistency in the atmosphere, culture, and service.
This strikes me as the ideal because you could attract people with both high and low openness to experience and neuroticism. And thanks to technology you could do it without needing to identify/hire lots of people with great taste, which is basically impossible at that scale.