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.