Starbucks to Rethink Core Brand ExperienceJuly 30, 2020 - by Taylor Getler
Starbucks perfected the cozy coffee shop experience, creating a formula for success that could be replicated in communities across the country – and eventually, the world. The company had achieved something that many in the foodservice industry can only dream of: they became a real “Third Place,” a spot to habitually visit outside of home and work. Besides offering food and beverages, Starbucks was a space to get work done, study, meet up with friends, and even conduct a job interview. One reason why they were able to build such strong brand loyalty with consumers was because their base felt a strong, personal connection to the company based on experiences they’d had at physical Starbucks locations.
The coronavirus pandemic has completely changed this entire landscape. Consumers have gone from needing a Third Place to mostly sheltering in one single space; indoor dining is essentially dead for the time being; and, as many shoppers are no longer commuting to the office or shuttling kids to activities, the “on-the-go” convenience of stopping for a cup of coffee doesn’t hold nearly the same value that it did just a few months ago. By the end of the third fiscal quarter, Starbucks’ sales had dropped a shocking 38%.
For a brand whose identity was grounded in physical, communal experiences, how can they stay relevant during the pandemic and its aftermath? It will be a mix of adjustments, including developing blended-format locations that combine traditional stores with a new “pickup store” design.
According to Starbucks CEO Kevin R. Johnson, these new store concepts will create a “familiar and convenient walk-through experience” for consumers. “Each of these Starbucks pickup stores will ideally be located within a 3- to 5-minute walk from a traditional Starbucks store, giving customers the flexibility to enjoy their beverage in our store or on the go. We plan to accelerate the development of over 50 of these stores over the next 12 to 18 months with a view to have several hundred in the US over the next three to five years.”
This sort of blended model also prepares the company for lasting consumer behavior shifts after lockdown restrictions lift. We don’t know how long these conditions will last or how many coffee drinkers will want to go back to indoor dining as often as they had in the past. More drive-thrus and curbside pickup options will give consumers more choices to match their comfort level. It could also allow Starbucks to grow in areas that might not have sustained a traditional physical location.
Presumably, another important element in updating Starbucks’ brand image for the new climate will be to emphasize how their products can be part of experiences at home. They have already seen success with this in their ready-to-drink line, which demonstrates that consumers’ love for Starbucks’ products transcends the coffeeshop.
The fall season is coming up in just a few weeks, and Starbucks’ seasonal products (including the famous pumpkin spice latte) are often major sellers. It will be interesting to keep an eye on what kind of brand campaigns start to emerge, since they will give us some indication of other ways that they are shifting their image to respond to the moment.