Starbucks Writ Large

Intrigued by the recent public fretting of Starbucks' corporate leadership (such as this enlightening 2007 email from CEO Howard Schultz) about the company's declining stock value and stagnant sales, I happened across this fascinating two-blog series of posts from two former company marketers, John Moore and Paul Williams, about what can be done to pump up the company's buzz.

Moore and Williams address Schultz's concerns regarding the loss of "romance and theatre" and sensory richness that long characterized the Starbucks experience for customers. Seeing as Starbucks has long promoted itself as a "third place" or community living room, it behooves an urbanist to pay attention. From Schultz:

For example, when we went to automatic espresso machines, we solved a major problem in terms of speed of service and efficiency. At the same time, we overlooked the fact that we would remove much of the romance and theatre that was in play with the use of the La Marzocco machines. This specific decision became even more damaging when the height of the machines, which are now in thousands of stores, blocked the visual sight line the customer previously had to watch the drink being made, and for the intimate experience with the barista....The loss of aroma -- perhaps the most powerful non-verbal signal we had in our stores; the loss of our people scooping fresh coffee from the bins and grinding it fresh in front of the customer, and once again stripping the store of tradition and our heritage? Then we moved to store design. Clearly we have had to streamline store design to gain efficiencies of scale and to make sure we had the ROI on sales to investment ratios that would satisfy the financial side of our business. However, one of the results has been stores that no longer have the soul of the past and reflect a chain of stores vs. the warm feeling of a neighborhood store. Some people even call our stores sterile, cookie cutter, no longer reflecting the passion our partners feel about our coffee....While the current state of affairs for the most part is self induced, that has lead to competitors of all kinds, small and large coffee companies, fast food operators, and mom and pops, to position themselves in a way that creates awareness, trial and loyalty of people who previously have been Starbucks customers.

Schultz's problem is complicated: how does one introduce a sense of uniqueness into 13,000 stores while ensuring a uniform product? How can Starbucks cafes be both individualized enough to encourage customer loyalty and ownership, while upholding ubiquitous company-wide brand standards? Local and global?

Below: Starbucks in Melbourne; Tokyo; and Berlin (via).

Moore and Williams dissect the issues facing Starbucks into five interconnected elements: loss of "theatre;" loss of "coffee aroma;" loss of "store soul;" lack of merchandise focus; and loss of identity. In a time of big-box retail, clone towns and the like, it makes for excellent reading on the values of sameness and difference. The two produce an impressive amount of ideas for changes to everything from the brewing of espresso, to different product foci for different stores, to allowing "homemade" promotional materials, to new ways the company's local outlet can get involved in the goings-on of its immediate neighborhood--all in the service of customizing the experience of each store, while preserving the qualities that define the company's brand.

From Brand Autopsy, Moore's side of the series:

Starbucks is opening a minimum of six stores a day somewhere around the world. The company has mastered the build-out process of opening new stores fast and inexpensively....The Starbucks “Kit of Parts” approach is akin to children playing with paper dolls. You remember paper dolls, right? Armed with an outline of a person and pages full of plug ‘n play paper clothing cut-outs, a child could create numerous looks for a person or for a family of people. Starbucks took this same mindset to its store expansion process by designing a palette of plug ‘n play pieces which can fit any store size....These plug ‘n play design pieces include point of sale counters, condiment bars, wall art, merchandise wall bays, Frappuccino-prep stations, Espresso Machine stations, etc....But this "Kit of Parts" mentality is really an issue of control for Starbucks....Starbucks needs to continue giving more individual control to each and every Starbucks. Allow them to make more decisions at the store level....A homemade sign promoting a jazz trio performance will not detract from the strength of the Starbucks brand. The time has come for [Schultz] to invest in giving his stores more creative control. To counter the loss of store soul and to inject warm neighborhood feelings, [Schultz] needs to unleash the power of creativity at the store-level. He needs the soul of Starbucks to shine through decisions made at the level closest to the customer—the store. After all, that’s what Mom & Pop shops do.

Why is this important? For the architectural ramifications of Starbucks' re-branding and the future of the "third place," of course; but also for Moore's and Williams' careful consideration of how the customer experience is orchestrated, and how stores are differentiated. These are design issues analogous to architects (such as Anna Klingmann), planners (such as Jan Gehl) and real estate developers seeking to deliver buildings, neighborhoods, and even cities that provide the kind of variation, amenities, and "quality of life"--that complex combination of ubiquity and uniqueness--that people desire.

While writing the previous post, I ran across a point made by Andy Guy of the Michigan Land Use Institute, made during a 2006 walk through Grand Rapids, Michigan with a writer from Dwell, that seems appropriate here. What's good for Starbucks could be good for cities, ultimately:

We walk through downtown, with Monroe Avenue full of people, a warehouse district full of remodeled factories and lofts, and up on the hill a huge new medical complex under construction signaling Grand Rapids’ intent to attract health-industry jobs. “The way that we develop is essential to how we compete in the global marketplace,” Guy says. “If we just look like anyplace else, who’s going to want to live here?”

A high premium is placed on unique urban identity, then; and it seems more difference is always better. Witness starchitecture and the drive for recognizable icons; witness the global contest between cities for the best and the brightest, articulated through the lens of lifestyle and cultural accoutrements, compellingly articulated in Richard Florida's ongoing work.

As a counterpoint, consider Rem Koolhaas' plan for Waterfront City in Dubai, his vision of the "generic city" brought to life. It is a statement of global monoculture--saturated with global brands, I'm sure--to be wrought in 3D:

His argument was that in its profound sameness, the generic city was a more accurate reflection of contemporary urban reality than nostalgic visions of New York or Paris....Designed for one of the biggest developers in the United Arab Emirates, Nakheel, Mr. Koolhaas’s master plan for the proposed 1.5-billion-square-foot Waterfront City in Dubai would simulate the density of Manhattan on an artificial island just off the Persian Gulf.

A mix of nondescript towers and occasional bold architectural statements, it would establish Dubai as a center of urban experimentation as well as one of the world’s fastest growing metropolises....The core of the development would be the island, which would be divided into 25 identical blocks. Neat rows of towers — some tall and slender, others short and squat, depending on the zoning — line the blocks, as if a fragment of Manhattan had been removed with a scalpel and reinserted in the Middle East.

One wonders about the pratfalls of creating something so purposely generic, especially in light of reading about corporate giants attempting to reinvent themselves, and particularly when "generic" urban conditions already exist in so many places. Additionally specific environmental considerations, such as Dubai's forbidding climate, would seem to impact the concept. Nevertheless, if built Waterfront City would prove an immense work-in-progress in organization, repetition and differentiation at a grand scale. Ironically what would set it apart from other urban districts worldwide is its intentionally nondescript character.

Comments

[Daniel Nairn]

I don't think Starbucks will ever be able to turn back the clock to a time when they were a spunky new and growing upstart. They have reached their evolutionary point as a global brand, with all of the homogeneity that entails, and probably their best bet is to simply embrace this market.

It's the actually mom and pop coffee shops, with a few regional chains here and there, who will step into the eclectic and theatrical niche that Starbucks has already stepped out of. There is no way that a reinstated local autonomy could compete with actual local autonomy.

I'm a pretty regular consumer. I'll drink Starbucks if I want a reliable cup of coffee at a highway rest stop, but Starbucks will never supplant my loyalty to the local cafe in my home town.

[Chris]

Hey Daniel--thanks for the comment. I'm pretty skeptical as well. You make a great point about local autonomy!

With so many shopping districts composed of the same retail mix nowadays I'm curious how/where a sense of local enters in, and Starbucks' issues seem representative of this. Like you I also wonder if any aspect of their attempting to "have their cake and eat it too" is possible or even wise.

[Chris]

In case anyone would like to see additional views of Waterfront City, look here:

http://arquigraf.blogspot.com/2008/03/waterfront-city-masterplan-oma.html