Comments on: Starbucks and Store Closings: How will it affect the experience? Update 8

By: rama

rama — Wed, 30 Jul 2008 04:47:08 +0000

I am barista Indonesia, I just want know the true of this gossip!
cause I don’t believe that starbucks is close.so what do say Becky?

By: Becky Carroll

Becky Carroll — Tue, 15 Jul 2008 15:01:20 +0000

Paul, thank you for your thoughts on this experience. Yes, both consumers and Starbucks partners will be affected by these closings for some time to come. What might really help Starbucks would be to enlist that “large minority or small majority” of their customers to go out and really evangelize the experience they love to others. In this economy, that may be the only way for Starbucks to break through the noise and get back to being the “third place”. Great feedback, Paul!

Doug, I have been frustrated by the “licensed” stores in the past as well. They detract from the Starbucks brand when the customer experience is less-than-stellar, yet customers view them as Starbucks. They may get more coffee sold, but is that beneficial to the brand in the long term? Probably not if the brand is trying to bank on the customer experience. Thanks for bringing it up, Doug!

By: Doug Meacham

Doug Meacham — Fri, 11 Jul 2008 01:39:32 +0000

I think Paul nailed it, not that morale has been great anyway. Starbucks has a relatively high turnover rate to begin with. I think the customer perspective on Which Stores to Cut highlights a bigger problem that I think Starbucks needs to deal with and that is the fact that “licenced” stores simply do not deliver the same experience as the company stores. If the company stores were to do everything right, these stores would still be out there doing things a little differently and that is going to be reflected in the opinion the average customer has because, to them, they are just “Starbucks”.

By: Paul

Paul — Wed, 09 Jul 2008 17:13:53 +0000

For many Starbucks customers, the experience is important enough that (if the experience survives) they would continue to go and pay higher prices just for that. However, that is at best a large minority or small majority of their customer base — I’m guessing between 40 and 60 percent of all patrons.

But the reality is that the experience will suffer through these closings (like any company going through downsizings, the employees are less focused on their jobs and serving customers, and more focused on whether they’ll have a job tomorrow and corporate gossip). If the employees are de-focused, no amount of training and corporate rah-rah will fix that. If no other shoes drop, this will take 18 months to work out of the system and for morale to start to improve.

Moreover, some of the changes that Schultz has already announced will further diminish the experience. No customers asked for the new proprietary Mastrena espresso machines to be developed. Ultra-automatic machines take control away from baristas (not that they had much with the Verisimo machines), and the only advantage is with a lower profile, you can see the baristas face. But if tuning is necessary to get the coffee right, too bad for the consumer. It will always be the same, good or bad. Only reintroduction of manual or semi-automatics in busy locations could restore that part of the experience (i.e. better quality coffee and heightened sense of theater.)

The truth is that Starbucks is undergoing market disruption. This is not about the economy, its about getting back to basics and finding an effective response to new competitors with serious market clout and lower prices. You can read more on my take here: http://www.anti-marketer.com/2008/07/has-starbucks-g.html

By: Becky Carroll

Becky Carroll — Mon, 07 Jul 2008 18:30:23 +0000

GL, thank you for your comment. I am definitely hoping that Starbucks succeeds in what appears to be a long-term initiative to strengthen the company. Great to see you here at Customers Rock!

Joseph, good to see you here again, and thanks for the compliment. I agree that the growth was too fast, and there are too many Starbucks around (including those pesky “franchise” stores inside airports and grocery stores which don’t seem to help the brand). We will continue to watch through the ReExperiencing Starbucks project and see what happens.

By: Joseph Young

Joseph Young — Sun, 06 Jul 2008 23:10:38 +0000

Great post Becky! I think the move to close down stores was inevitable for Starbucks. Their rate of growth seemed unsustainable and their current financial problems and restructuring reflects that. Briefly reading over the press release, the number of employees released was quoted at 7%. I don’t find this as a significant portion of the Starbucks workforce, and am confident that the best baristas from those locations will be relocated.

This “pruning” as you and John describe it should help improve the overall customer service and be beneficial in the long run. Where I live, there is an intersection that has 4 Starbucks; one on each corner. Trimming 7% of the staff from those 4 locations would not have a significant impact on the quality of service, but would probably help to improve the quality of the remaining baristas.

By: GL HOFFMAN

GL HOFFMAN — Sun, 06 Jul 2008 19:57:03 +0000

Good points, Becky, and I hope the store closings will give a needed boost to starbucks. Sometimes, the act of pruning sends a very clear message to a lot of people and audiences.