Friday, January 21, 2011
Starbucks' renaissance under Howard Schultz's direction has been relatively well documented. And, it has been a fairly significant financial success, from closing a number of underperforming stores that had sprouted like weeds to reinvesting back in the core product (coffee). But, it hasn't been without some hiccups along the way. There was a foray into value pricing, seevral attempts at reinvigorating the food offer (oatmeal seems to have finally worked) and the latest high profile logo change (better than Gap but we have some issues...).
One of the most interesting tests during this period was the un-Starbucking of an actual store, opting for a local flair in Seattle under the name 15th Avenue Coffee and Tea. Designed to invoke more of the warmth of a local coffee shop, this store attempted to market the brand incognito. While this was an obvious attempt to counter the commercialization and ubiquity of Starbucks as well as addressing the decline of "third place" status, we weren't enamored from the start. Customers can too easily see through this type of artifice. The real key is to change what Starbucks stands for (at its roots--the best coffee and the third place) rather than substitute a different name. Last week, they announced the merciful ending of the 15th Avenue experiment.
At the same time, elements of that idea are now being rolled out into next generation Starbucks prototype. The latest, in Seattle, on Olive Way, represents how that new direction can be managed under the Starbucks brand. The space is vast and open, filled with environmentally friendly touches. It was filled during our visit with people happier to gave a real third place to hang at. There are fewer barriers between barista and customer and a significantly more relaxed vibe. The menu expands to include wine and beer (intriguing to say the least) and Starbucks Reserve coffee gets heavier play.
While this store is expensive to build, takes a fair amount of real estate and would seem challenged to handle peak rushes, it certainly elevates the brand to a hip place worth hanging out at.
Stay tuned as the experience continues to evolve.
Posted by Neil Stern, Senior Partner, McMillanDoolittle, The Retail Experts at 12:55 PM