FBlog

In the hometown of Starbucks a small and quiet revolution is being trialled at one of Starbuck’s stores. A coffee shop becoming a wine bar..yes, Starbucks is to start selling Wine, and beer, and cheese! The US $15billion dollar business is in the process of reinventing itself to capture more late-day part trade and in the process to create a new platform for brand growth and expansion. Good for Starbucks. On Olive Way, in Seattle’s Capitol Hill area this new Starbucks is the result of 2 years in corporate innovation, trial-and-error with product and service developments. Rather than just ‘roll out’ the concept, Starbucks is refining and testing in order to align what and how the coffee chain can become more than just a coffee chain. Starbucks is over 40 years old, but really gained global notoriety in the 90’s as coffee consumption was reinvented…part convergence of upmarket and gourmet food trends, partly the mass-affluence of a thriving global economy and partly influenced by the rise of ‘coffee culture’ and reflected in the role of the ‘third space’ in popular culture in shows such as Friends (the Central Perk), Frazier and other US global shows. The idea that a coffee shop was a ‘cool’ place to hang out and coffee was not just a cup of black instant, or Sanka (what happened to THAT brand?)

Starbucks is practicing what good brands and management must do which is to continually re-invent, experiment and move forward. Shareholders expect growth or profits, and customers expect innovation. And, in an increasingly competitive marketplace a brand leader must always create their future. Otherwise, they become yesterday’s brand and fade away into insignificance. With over 16,000 outlets worldwide Starbucks cannot approach this lightly. And, by their own admission they are trying to make their ubiquity work to their advantage by becoming more a part of the community. The insight Starbucks have used to drive this is twofold: 1. Customers trust Starbucks to deliver a quality and consistent formula for coffee. Their stores are clean, accessible and comfortable to all ages and gender – BUT, they are really only utilised for half of the daypart (morning); 2. If Starbucks can make wine/beer and ‘tapas’ like socializing part of a third space routine for people, they will be on to a winner. Customers will pay and enjoy, and the assets (stores, staff, products) will be utilized more efficiently. By deliberately designing stores to ‘fit in’ more with local neighbourhoods, downplay the ‘logo’ dominance of the 90’s and introduce more variety, flexibility and choice to menus and service routines the brand becomes more ‘familiar and friendly’.  This is something Starbucks needs to do for its brand to remain relevant and popular. The new stores and ‘wine bars’ are also more environmentally sustainable, looking to include hi tech and green solutions to energy consumption, recycling and carbon neutral planning. So, if successful there is a big potential upside.

What can other large brands with an already familiar and successful formula learn from this? Brands must continually differentiate or die. Brands must experiment and innovate to stay ahead. Brands must not be afraid to grow their business by using both consumer insight as well as business insight to move beyond today and, to create and shape their future. Note to corporate self: it does not always have to be done with a one-size fits all, and massive change everything roll out either. Innovation is about experimenting, refining and getting it right in logistics as much as in marketing. It is not about just putting a new coat of paint on a store, putting in some new products and then advertising the heck out of ‘What’s New?’, or ‘HEY, we now sell WINE!’. It is about fundamentally aligning the brand with a business vision and purpose. Companies need a branding vision which meets both consumer needs and customer expectations with a little brand passion and future-imagination thrown in. I think Starbucks is on the right track and wish them well…Howard Schultz reinvented ‘coffee culture’ singlehandedly, let’s hope he can do the same for wine/beer and cheese socializing. If successful, Starbucks will wind us up in the morning with caffeine and help us unwind at night with a glass of wine. From Barista to bartender – the brand is moving on.