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How Starbucks Gets It's Grove Back

May 6, 2008
I happened to be up way past my bedtime recently after drinking too much coffee and came across CNBC's American Made broadcast on Starbucks...again.

I say again because I have seen the show probably twenty times and I can't tell you how passionate Howard Schultz comes off during the interview. The most powerful aspect of the interview is the concept of the "3rd Place", or the place you go and hang out between home and work. Now this truly is a terrific marketing concept. But it has to be a focus; it has to be part of the organization's character because it would come off shallow and self serving if not executed properly.

Starbucks had this "mojo" but lost it. They lost it between the CD's and the books, and the sandwiches and the espresso machines that provided precise measures of the particular shot called for, but also removed the artistic value from the baristas as well, not to mention the smell. It was amazing, I would get home from a business trip and my laptop bag still smelled of the last Starbucks I happened to call my home for a morning or afternoon.

This is 3rd Place really is an idea only a handful of organizations could take advantage of, and I think Starbucks is not doing such a great job of it right now. It seems that each new store gets smaller and smaller and therefore less appealing to pull out the laptop and spend some time knocking out a blog post, translation..buy more stuff.

Now, I am not sure if the store's shrinkage is purely a square foot issue or does there appear to be more stuff for sale on the floor? As a shareholder, I am not complaining, please extract as much revenue from each and every one of us as possible, but also make the locations "homier" if you are genuinely looking to re-purpose the "3rd place" idea.

Most of my local Starbucks have moved away from the comfy couches and chairs and have opted instead for more traditional "table and chair" arrangements. The problem is it creates a sterile environment since the furniture looks like it is straight out of some eastern bloc industrial design shop. No form, just function.

Howard, make it a truly "3rd place" experience and the people will come, the students and the moms and the business men & women will flock to the locations IF you can bring back that "experience" you talked about. BMW, Polo by Ralph Lauren, and Apple have all created an image of cool for their customers, and Starbucks had it too. But it was lost and needs finding...quick.

How? Mr. Schultz, if I were you, I would take a page out of the great Jack Welch's playbook and spend the next year driving this "3rd place" concept down every throat you can...along with a latte...and get the sexy back. That is after all, one of your key differentiators in the marketplace and that is what makes you different from McCafe' and Dunkin' Donuts and Krispy Kreme.
About the Author
Darren Starbucks blogs about all things Starbucks . He has been to over 300 Starbucks in the United States and has the expense bill to prove it! He is the head blogger at http://thedripp.blogspot.com talks about Starbucks the business and the brand.
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