Will Schultz's new plans bring back Starbucks' magic?

Posted by: Burth Helm on March 20, 2008

At yesterday’s annual shareholder meeting, reinstated CEO Howard Schultz announced several new “customer-focused” (let’s just call ‘em “marketing”) initiatives. They show Howard Schultz and his team are as cutting edge as any marketing guru. Their plans includes transforming the in-store experience with a new, waist-high espresso brewing machine (the friendly barista won’t be hidden behind a bulky machine), a sophisticated rewards card program to give customers free coffee and discounts, and a social network, my starbucksidea.com, where users can submit and vote on suggestions for the chain and hear back from Starbucks employees.

But will consumers care that they will now be able to make eye contact with the barista while he or she pulls espresso shots? Will they pay more money for a “Clover” cup, the name for the individually brewed cup of super high-end coffee the chains will soon offer (another announcement)? And will Mystarbucksidea.com actually forge a deeper bond between the chain and its customers? Or do people just want their damn coffee?

As Starbucks shares have plummeted over the last year, the fundamental question about the company is this: is Starbucks still the romantic coffee shop it believes itself to be? Some observers (this writer included) have pointed out that at more than 15,000 stores across the world, including stop-and-go outlets in airports and train stations, Starbucks is a strong business, but a very different one. It’s a mass-market brand, known for reliably serving up a cup on the go – a caffeine “filling station,” as the Wall Street Journal called it.

I think some of the new initiatives, like the rewards program and the website, are smart no matter what kind of brand you have. The first engenders customer loyalty, and both throw off scads of consumer data Starbucks can use to make smart decisions. I can’t wait to see how the other initiatives go. We’ll see if we’re watching the best comeback since Steve Jobs at Apple, or simply another founder paddling against the current, hoping to return his company to what it once was.

Reader Comments

jason

March 21, 2008 7:39 AM

The Clover is a great machine, but like anything in a cafe it is reliant on who programed it, who's operating it, who's set the grinder, and the quality of the coffee. $$$bucks will have quite a task to get all those things right across all their stores.

Dennis

March 21, 2008 10:03 PM

It's easy to throw invectives at someone when you're hiding somewhere in the internet but I really don't think Burt Helm has any idea of what he's writing about. What other kind of company and leadership would offer it's part-time workers health care benefits?

Russ

March 23, 2008 12:16 AM

I WAS a $3.95 (for a triple), two times a day customer... roughly $160.00 per month. No more.

Until they (Starbucks) roll-back prices to a more reasonable level they will continue to see a decline in their customer base. This will result in more need to present higher priced products just to maintain income. Thus resulting in more lost customers.

You are seeing the end of Starbucks...

CAROLE REBUTH

March 26, 2008 12:30 AM

YOUR PRICES ARE MUCH TOO HIGH.YOU SHOULD HAVE A SPECIAL DRINK JUST FOR KIDS.WITH WHIP CREAM AND CHOCOLATE CHIPS ON TOP. NO MORE THEN $150. DON,T BE SO GREEDY AND YOU WILL MAKE MORE MONEY.I HEAR MOTHERS TELL THEIR KIDS THEY CAN'T AFFORD TO BUY EACH OF THEIR CHILDREN A DRINK,SO THEY BUY ONE AND SHARE. I LOVE YOUR CAKES BUT I ONLY BUY ONCE IN A WHILE.

randy payment

April 6, 2008 7:59 PM

Working as a Construction Superintendent, I purchase a venti drip coffee 3-4 times a day.
My suggestion to Starbucks is to either, emboss or print on the inside of your cups, the level of coffee should you want room for cream, or not. The hostess will ask you if you want room, or not, yet will fill your cup to the rim with coffee, leaving no room for cream. Many times, myself and many others will just pour the excess into the trash can as there are no sinks or, drains to do so.
If Starbucks is so adamant about being concerned about the environment, then you ought to consider the amount of water being "dumped" into trash receptacles just to make room for cream,(6-8 customers would produce enough water to fill a "Ethos" water bottle). Not to mention the amount of coffee that is literally, being wasted.
This is not a locally isolated concern as I have encountered the same in other states from Colorado, Texas, New York, New Mexico, Wyoming, New Jersey and Illinois.

Esther

April 9, 2008 5:17 PM


You need to have a day for babyboomers who have come of age..after all everyone else
gives a discount..like Ihop, Ross, etc

We deserve a coffee break after working most of our lives and will still have to
work after retirement, because we cannot
live off SSbenefits...I will be truly shocked if you take this step!

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About

News, opinions, inflammatory meanderings and occasional ravings about the world of advertising, marketing and media. By marketing editor Burt Helm, Innovation Editor Helen Walters, and senior correspondent Michael Arndt.

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