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5 Ways To Make Starbucks A Better Experience From Pentagram.

Posted by: Bruce Nussbaum on July 25, 2008

Starbucks needs some innovation and not just a makeover. It needs serious business model innovation as well as a significant redesign of its space. Pentagram’s Jim Biber has a terrific piece out in Architect magazine that is insightful, honest and possibly the best way for Howard Shultz to save Starbucks. But it’s pretty radical.

The funniest and truest of Biber’s suggestions is the name change—from Starbucks to just bucks, or *$. Let’s face it, Biber says, the company was once based on the leisurely Italian coffee house model of a quiet place away from house and office, with personal relationships between customers and baristas, and a nice wait for hand-brewed coffee. Those days are over with Starbucks’ huge growth and emphasis on efficiency and speed. Shultz is trying to get back to the old days but that’s impossible, given Wall Street’s imperatives. So why not just be honest and embrace what really drives the company—bucks?

I love this truth, even if it is a little harsh.

Biber goes on to say that Starbucks now has at least three kinds of customers and relationships with them. It should redesign its stores to reflect that. For those who just want a quick cup of coffee, create a fast line, perhaps outside, for them. They shouldn't have to wait more than 30 seconds.

A second group of customers want their coffee, something to eat, perhaps a New York Times--and they usually want the same thing every morning or afternoon. Design a space for them right inside the door. They can use their store card to order. Time? Two minutes for them.

And for those who want complex drinks, a deep personal relationship with their barista and time to write the Great American Novel, design a space at the back of the store just for them to take as long as they want. Their social experience doesn't interfere with the desire for efficiency from other Starbucks customers. Brilliant this.

Beiber also has a sweet redesign of the store itself, putting all the accessories now sold online, and making Starbucks true to its new self once again.

Howard, listen to Jim. He is giving you a million dollars worth of IP for free here.

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Reader Comments

Michael Loyst

July 26, 2008 01:13 AM

Sadly, as much as i love this company and i wish to see it go back to focusing on the coffee, i agree that this does not appeal to investors. During the early 2000's, Starbucks expanded opening stores on almost every street corner, i guess the theory there was id they got the lease on a space, dunkin or mcdonalds wouldst.


July 27, 2008 01:26 AM

10 years ago on the newsgroup (back in the days of Usenet, before blogs), Starbucks was even ridiculed for their quality shortcomings then... and there they were universally called "*$" for short in posts.


July 27, 2008 08:40 PM

I love the redesign and moving the merchandise to the internet.

I wish Starbucks also had the flexibility to adapt locations to its primary customer base. Near office buildings? Spacious tables, outlets, and quieter music. Find you have a lot of parents/nannies coming from the park, waiting for story time to start at the library, etc, then have tiny toilets, low sink, changing tables, some kid-sized chairs and tables, and plenty of stroller space.


July 28, 2008 05:04 PM

Changing the name to *$ is the kind of stupid idea that anyone else would get made fun of, but because it's Pentagram, apparently it's a great idea.

If you're going to write about Innovation, you shouldn't just fawn over every idea IDEO or Pentagram come up with because they're Pentagram or IDEO. They have dumb ideas, too.

bruce nussbaum

July 28, 2008 08:42 PM

You're right. I have seen lots of dumb design ideas over the years and a few have come from IDEO and Pentagram. Can to share which dumb ones from these two firms you dislike most?


July 28, 2008 10:35 PM

IDEO: Audrey -or- discovery channel shopping cart

Pentagram: Fuego


July 28, 2008 10:51 PM

I’ve allowed a couple of days for others to respond, Bruce, so I hope this lengthy post will be OK. I enjoyed Biber’s proposal but I think it misses some important points.

First, although I believe that Biber is right about the importance of the physical design of a Starbucks Café, he (and almost everyone else!) seems to be unaware of the original archetype café that started the whole modern espresso-based coffee movement. This European coffee bar featuring Starbucks Coffee opened in Seattle in January of 1980. It was called “The Boiserie”, situated within Washington State’s Burke Museum of Natural History located on the northwest corner of the University of Washington campus. It was created and operated by museum staff and had thousands of customers per week by the end of its first year of operation. By the end of its second year it had introduced more people to Starbucks espresso than the Starbucks stores had in the previous decade. Although this café is no longer run by the Museum (University food service took over), you can see the physical site by Googling “Burke Café”, as it is now called.

Here are the components of the original café:

A. It was specifically created to raise funds for the Museum during a recession! It was controversial. “Who would pay a dollar for a cup of coffee?” was a common refrain.

B. It was specifically oriented to an adult audience. The museum gift shop remained in a different area of the museum. The market for the café was essentially composed of students, staff, faculty, and museum visitors. This group of largely single and “single-emulating” adults (see changes in mating post 1970’s) who were age 18 to 60 formed the initial core of yuppie coffee drinkers.

C. The Boiserie was completely balanced in its connoisseurship. Not only was it attached to a museum, but the cafe offered fine local pastries, fresh-squeezed orange juice, rotating original art, occasional concerts and KING FM classical radio, all with smoking prohibited. The Boiserie “flipped” the aura of espresso from counter-culture to upward mobility.

D. The servers were not called “baristas”—they were, after all, headed toward or engaged in other careers. No tip jar and no fawning “legendary service” in lieu of a quality across-the-board production.

You may be wondering what Howard Schultz has to do with the creation of the successful European coffee bar featuring Starbucks Coffee. The short answer is: Nothing!—except in a kind of Bosnia sniper story way. He had nothing to do with it except to make a scaled back version of The Boiserie, a “Starbucks” café that was already established when he arrived in Seattle, and clone it everywhere with the help of an aggressive real estate strategy. His later attempts at getting some credibility as an innovator have generally failed; and needless to say, big questions arise every time someone suggests that Starbucks should return to its roots, since he made little, if any, contribution to those roots, and he seems unaware that the espresso coffee bar was created as a response to the recession of the early 1980’s.

This is Starbuck’s main problem—it has a salesman for a CEO who has coasted on someone else’s business design for a couple of decades now. It’s not just that Howard Schultz doesn’t get innovation—he is actually repulsed by both innovators and the process of innovation. The company has operated like a giant dinosaur thrashing around and living by eating smaller and more creative mammals.

A second problem that Biber seems to have missed is the fact that half of all Starbucks customers are financially stagnant or downwardly mobile individuals. They had no business frequently buying “yuppie coffee” even before there was a recession. Last Sunday’s New York Times had an excellent illustration of how the American population’s personal financial profile has changed over the last few decades. The financial prospects of those customers at the Boiserie were completely different from today’s customers—remember a $3 per day Starbucks habit costs a worker over $700 a year. This week a network newscast did a feature calling this the “latte effect”, or creeping self-indulgence. Starbucks will end up being used as a verb for being nickeled-and-dimed-to-death in personal finance courses like Suze Orman’s or Dave Ramsey’s if they don’t reformulate their market. In short, they need to cut their customer base in half and get a whole lot more dollars out of the upper half.

Here is what Starbucks needs to do right away: Consider the value and characteristics of:
1. Brand
2. Connoisseur coffee
3. Ubiquitous locations.

Today these elements are unclear in relation to each other and are being totally misused. Frankly, the damage has already been done to the Brand. Its one commercial in the “PC guy vs. Apple guy” genre from being “Q”ed up. This phenomenon refers to the difference between the general connoisseurship of James Bond (Aston Martin, Walther PPK, etc.) and the overly-detailed fussiness of the gadget guru “Q”. Bond would never use a paragraph to order a drink, Q always does, he likes attention. That’s not cool, it’s sophomoric.

Biber is on the right track, but I don’t think he goes far enough. Realize now, that the only value the Starbucks name will have is on a coffee vending machine. This is no joke—Starbucks needs to automate the Clover or some other process, use a Biber- style customization card and work as hard as they can to replace the proverbial office water cooler with a Starbucks Barista 3000, with a “Volkswagen beetle” price of $1.50 to $2.00 per drink.

Simultaneously Starbucks needs to address its supremacy in 2. Connoisseur Coffee by creating the new members –only, over-21, Mermaid Coffee Club for key-holders, at $100 to $500 per month dues (excluding the cost of beverages) with balanced old-school connoisseurship including real furniture, art, and no junior high school dropouts, or mothers with small children in tow. Several of these Mermaid Coffee Clubs could exist in every major city around the world

Lastly, the majority of Starbucks Cafes would be transformed into “The Sisters” World Coffee Shop (logo of two mermaids). These cafes would have a streamlined menu focusing more on coffee. A vital feature would be one wall with six screens carrying live feeds from six other Starbucks around the world. Each Starbucks interior would be web cast live to six other “sister cafes” around the Starbuck’s universe. This is the way to make ubiquity work for Starbucks.

Another wall would feature six live feeds from nature webcams. Now that’s a café worth paying $3+ to visit!

I hope people will not forget The Boiserie. It is after all, one of the greatest public sector innovations to ever reshape the business landscape.


July 30, 2008 04:02 AM

I think Tim is pretty close to the money on his comments. I had a look at James Biber's remake and the only aspects I aggreed with, was that star bucks needs to change and they need to simplyfy.
Besides that I think he is way off, the logo doesn't come close at all. You don't tell customers you want to make money from them, even though making money as a core driver for all businessess, it should never be implied to consumers that that is what you are doing. The interiors also indicated a lack of understanding of customers, his discription showed a lot of 'I think they should' and not enough of the customer's are asking for. Simply put, the brand needs to be clear but the experience MUST be flexible but not to the point that it dilutes the brand.
Here's a clear example I live in Melbourne Australia, we have a street which is full of coffee shops and resturants with trees and stuff its a very comfortable relaxed atmosphere, but in the middle you have a star bucks and it sticks out like a sore thumb, the exterior and interior design is a clear, off the shelf job and they have not bothered taking the time to study the culture of the community, further more the coffee's aren't very good compared to the coffee shops next to it. If i want an espresso I want in in a proper esprosso cup not a paper cup. If im at work in the city i don't have a lot of time so I want a quick coffee and quality isn't that important. It's about understanding location and the people, don't just dump an off the shelf business and think it's going to work.
Whilst I hate to use this as an example but look at Mcdonalds they have a simple menu and the eating experience consistent across it's customer base and its chain stores across the world. You have to give them credit whilst there food splits the community of those who love it and those that hate it, they're experience and ability to adapt and change for each global market is pretty extraordinary.

Wayne Shipman

August 1, 2008 03:35 PM

Why not skip the retail experience altogether? Get everybody a caffeine pump and sell refills at the pharmacy counter?

I get the separation of slow vs quick service. I don't think it refines the brand so much as toss out the baby, the bathwater, the tub and the soap. What could justify this wholesale makeover on a financial basis?

I like Starbucks coffee. I buy it in big bags, whole bean, at BJ's Wholesale Club. You can get Starbucks coffee at the supermarket, on airplanes, airports and my company cafeteria. Could this be what diluted the brand, too? Ubiquity beyond the retail shops?

The lines at Starbucks in the United terminal at O'Hare are always there, ten or twelve people long, getting food and drinks. The product has held it's value for consumers for quality, taste and variety. I just don't need to make a stop at the retail locations anymore.


August 3, 2008 02:05 PM

I'm impressed by the amount and degree of thought that Bruce and all of the bloggers have put into resolving the 'Starbucks Issue'. Damned impressive! But rather then reinventing the wheel...and Starbucks has been a rather impressive wheel, perhaps recognizing that consumer discretionary spending always slows during economic downturns. And then, almost like magic, increase as the economy picks up. There's a concept that may see Starbucks rebound. An economic rebound. I think I'll finish my vanilla latte and read something that more depth and less pompousness...

Joe Remo

August 3, 2008 05:04 PM

Hi Bruce,

I don’t know if you have written about Internet Cafes.

I found Jim Biber’s redesign for Starbucks interesting and wondered how he would redesign an Internet Café.

I know Internet Cafés are not as popular in the US as other parts of the world.
But I believe that they could be popular with the right design.
Also the name would have to change, in my vision, to fit with different venues.
In one venue, coffee could be served and another venue alcohol could be served.
What it will come down to is how the content from the Internet is presented or delivered.

For example, I love to go to Barnes and Noble and browse through magazines and books. But my guilt prevents me from reading the whole magazine or reading parts of a book.
I will buy a Java Chip Frappacino for some redemption.
One thing I have been dying to do is bring a camera with me and take pictures of pages in a magazine or book. I do write down links for later viewing at home.
I also hate to carry my laptop with me to B&N.

I wish there was a place or venue where I could go and feel free to browse through a whole magazine or book without feeling guilty. And be able to capture links, photos, etc. directly to tumblr or weblog. And be able to meet people with the same interests as me. I wish I knew when someone interesting was there the same time I was there.
This could all be possible with the right software system and the available computing devices for those who don’t have a laptop or don’t want to carry it to the venue or for people just passing by.

But assume this software system was built, how would the physical setup look like.
How would you arrange the computing devices? Certainly not the boring way that current Internet Cafes have it set up. And I would definitely like to see big screens available for whatever reason that could exist. I would also like to see a private area for group gatherings.

I know that eventually the Internet will be accessible anywhere. I would like to see it happen sooner.

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Want to stop talking about innovation and learn how to make it work for you? Bruce Nussbaum takes you deep into the latest thinking about innovation and design with daily scoops, provocative perspectives and case studies. Nussbaum is at the center of a global conversation on the growing discipline of innovation and the deepening field of design thinking. Read him to discover what social networking works—and what doesn’t. Discover where service innovation is going and how experience design is shaping up. Learn which schools are graduating the most creative talent and which consulting firms are the hottest. And get his take on what the smartest companies are doing in the U.S., Asia and Europe, far ahead of the pack.

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