The news of Starbucks‘ death has been greatly exaggerated.
That’s all I could think of when reading the media and blogosphere response over the past week to an executive memo written by Starbucks’ founder and corporate chairman, Howard Schultz (as reported here on Feb. 24). In the memo, the founder lamented the loss of Starbucks’ “romance” for the sake of rampant, metastasis-like growth — citing the infiltration of superautomatic Verismo machines, bagged coffee, and cookie-cutter store designs. The memo was leaked as a sort of PR stunt; Starbucks first floated it out, leaving it up to public interpretation to see if it had the desired effect, and only afterwards did the corporation verify the memo’s authenticity.
But why was this suddenly breaking news to everyone?! Are people so mindless before their morning cup of caffeine that they’ve walked into Starbucks like automatons for the past dozen years — not noticing Starbucks’ relentless execution on their massive growth plan at the expense of quality?
“Yo! This is Mars Blackmon and I’m chilling with my main man, Howard Schultz!
Yo, Howard, what makes Starbucks the biggest coffeehouse in the universe?”
While some see this as reason to start sifting through the Starbucks ashes (kind of like drinking their coffee, in fact), I am not about to feel sorry for Starbucks making money hand-over-fist. It’s not like this “news” has halted any of their plans to double their growth plans to over 40,000 cafés. But for the marketing wonks who try to justify every business success as a deliberate brand strategy, the memo did not sit well with them — there are things to be fixed and professions to justify. (Meanwhile, shareholders keep counting the money.)
Sure, there are those who lament the watering down of the Mercedes-Benz brand when their automotive offerings started going downmarket to entice new customers. But that has hardly hurt their pocketbooks. An elitist brand is worthless without a profitable base of mass consumer appeal. As in The Big Night, while Primo lamented the rape of cuisine going on at a rival Italian restaurant, consumers were passing on the risotto and opening their wallets for spaghetti & meatballs.
“Is it the machines?!” “No, Mars.”
Among these lamenting marketing wonks is a pair of former Starbucks marketing guys who surprisingly knew very little about what made Starbucks successful. They’ve gone so far as to ridiculously suggest that Starbucks replace their Verismo machines with the return of their old La Marzocco lines (“Starbucks should put the Verisimo automated espresso machines in higher-volume stores and put the La Marzocco manual machines in lower-volume stores”).
The genie is already out of the bottle, folks. Starbucks “going back” is akin to asking Gorbachev to roll back Perestroika (Gorbachev being my favorite Starbucks analogy) because too many of Putin’s critics are ending up dead and glowing. Today Starbucks has some 140,000 employees. Can you imagine the complete chaos, and expense, if even just 20,000 of their low-wage, push-button employees were suddenly asked to operate sophisticated machinery? May as well give every bicycle commuter in Ho Chi Minh City a Volvo and tell them to drive to work tomorrow.
“Is it the baristas?! It’s gotta be the baristas!” ” “No, Mars…it’s not the baristas.”
Some of the branding recommendations even include showcasing some of Starbucks’ best baristas (“Starbucks must give permission to store partners to showcase their flair and personality while on the bar”). Really — only a few of us coffee geeks, an unprofitable minority, even care about these things. To the rest of the world, a “barista” is hardly an elevated profession. Due to the likes of Starbucks, the barista has become a modern symbol of downscale jobs, skills, and wages; coffee’s version of the minimum wage McDonald’s fry cook.
More to the point, there just aren’t enough quality baristas to go around — particularly for the volume that a massive chain like Starbucks would need. The best ones wouldn’t be caught dead in a behemoth such as Starbucks … and would work elsewhere for better tips and appreciation.
The other marketing wonk proposal is that Starbucks differentiate between their retail stores. But that would just create a bizarre Starbucks caste system — defeating many of the business goals of their ubiquity. Launch “Starbucks Select” (gag, cough, spew), and the Starbucks brand becomes a liability at the high end of the market. Take a page from The Gap and differentiate between your Banana Republic’s and Old Navy’s (e.g., call it “Howard’s Grand Café”), and these quality efforts become completely dissociated with their flagship brand and add nothing to its eroding value.
“Money, it’s gotta be differentiation!” “No, Mars.”
So Starbucks is naturally under attack from the likes of McDonald’s and Dunkin’ Donuts; that’s to be expected. You’re making a boatload of money, and others are following suit to ride your commercial coattails. You’re going to attract imitators, but that’s the price of success. “Romance” has nothing to do with it. I would argue that if Starbucks didn’t take the low road of mass production and commercialization, their company would have been run roughshod by today’s upstarts who run quality circles around them at the high end of the market.
So here’s my advice, Howard. Forget us coffee elitists. You clearly abandoned all hope of keeping us engaged many years ago, and it’s hardly hurt your bottom line. We fled your brand with no intention of ever turning back. (No hard feelings — we just agreed to part ways a long time ago.)
And the superautomatic machines? So what! — just keep the drinks coming fast and in a “clown-free” environment. Keep on cranking out the double-tall, four-pump vanilla caramel macchiatos and your broad array of coffee-flavored beverages. Note that I did not say “coffee” — as your profits are in coffee-flavored milkshakes, not in single shots of espresso. As I mentioned before, most people really don’t like coffee anyway. A key ingredient to your success has been convincing your customers that they do like coffee — just your version of it.
Stay true to these facts and you’ll be nicknamed “Money” for many years to come.
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