CMO Poll: Starbucks Right To Try New Format

Posted by: David Kiley on July 29, 2009

Starbucks coffee.jpg

Can I pour you some booze in your coffee? Starbucks, which has been struggling the last 18 months to find new relevance in a world where a latte can be had just about everywhere including McDonald’s, is expanding its retail empire to include a new format: The new coffeehouse is called 15th Ave. Coffee & Tea, and is an attempt by SBUX to create an upscale venue that serves beer and wine, coffee made from a hand-pressed espresso machine, poetry readings, etc.

The new format store, if successful in Seattle, will grow into other cities.

Brand New Day and The CMO Club posed this question to the members of the CMO Club:

Starbucks is opening a new format store which includes beer, wine, new food, film screening, and live entertainment. Is this the right move?

101 CMOs responded:

38.7% Yes
25.7% No – Focus on improving cust. experience
18.8% No – Focus - Differentiate vs.McDs/Dunkin
16.8% No – Need new format but not this

A few Quotes from CMOs in the club who responded:

“They made themselves a semi-upscale destination during the morning and midday time periods with a concept that fostered relaxation and ‘connection’ (in all formats) and appealed equally to Boomers, Gen Xers and Gen Yers. Makes equal sense to create a semi-upscale destination during the evening time period, so they can have an anchor in all dayparts. I think this is an un-met need in the marketplace and they’ll certainly get trial. The trick will be to get repeat.”

“Starbucks can be a different experience vs. McDonalds and Dunkin Donuts. Many enjoy reading paper or on their pc with a cup of coffee without kids yelling at the next table. They should focus on their unique differences.”

“Customer experience is the only way to combat price differences with today’s consumers. Have they exhausted all new ideas and approaches to improved customer experience?”

Reader Comments

Kevin Keenmon

July 29, 2009 10:00 PM

I see this being a really good move for Starbucks. All ages of people will enjoy a relaxing environment where they can enjoy a beverage of their choice, whether it be tea, coffee, beer, or wine.

Kevin's Advertising Blog

Emily S.

July 30, 2009 10:35 AM

I think this could be a successful move for Starbucks. Though I am an avid tea drinker and a huge fan of pastries, I find Starbucks' pricing, wide span of choices, and cozy environment too overwhelming for a morning or mid-day coffee. I prefer to visit Starbucks on the weekends, or in the evening, when I meet friends for a cup of coffee or need a place to get some work done, read, or otherwise relax. This new format seems to tailor to a different type of coffee-drinker. One who like to experiment with flavors, take in the atmosphere and maybe even some music while they are at it. I look forward to following the result of this new SBUX endeavor.

frank Loweser

August 3, 2009 8:41 AM

I think it is okay for sbux to get maybe 20 of these up, but i would caution against going too far. They still don't have the core stores right in terms of redefining them and fixing the merchandising ad menu.

Could be that Howard Schultz has decided hat the basic stores' busienss is not going to grow much no matter what nd that this new format could be the secret to growing revenues and "share of mind."

bmvaughn

August 5, 2009 7:56 PM

Small coffee stands in Seattle are hitting back:
http://www.magnoliavoice.com/2009/08/05/java-jazz-vs-starbucks/

Heru

August 8, 2009 4:46 PM

i dont think so..
Starbuck is for coffee like McD serves Burger.. what if McD serves Japanese or Chinese Food ? Would you order that menu ? Well, i wouldn't.

XU Hui, Dorothy

August 12, 2009 11:03 AM

In my opinion, 15th Ave. Coffee & Tea is not an exquisite idea in an economic slum, although it seems to rekindle Starbucks’ extinct passion. Regarding to the product 15th Ave offers, it can be regarded as ‘Original Starbucks’ coffee + wine + beer’, as is shown on its name and slogan ‘We are inspired from Starbucks’. Moreover, I question whether wine and beer are 15th Ave’s core business or not. If so, 15th Ave. Coffee & Tea is a combination of ‘Coffee shop and bar’. Yet this differentiation point is not plausible to reason patron in 15th Ave. Coffee & Tea. Since a bar can fully maximize customers’ need for wine, beer and nice atmosphere as well, it is not strategic for Starbucks to create this new business venture, which may encounter embarrassment by its dual roles. If wine and beer are not mainly served in 15th Ave. Coffee & Tea, they can not be viewed as a thrilling differentiation point.

XU Hui

August 12, 2009 11:13 AM

it is arguable whether poem reading can prolong in 15th Ave. Coffee & Tea’s regular business. Imagine in busy flourishing Seattle, how many people will spend at least one hour in poem reading every day? I don't think there is a lot. The reason is simple: A coffee is necessary but not a poem. A guy may spend couples of hours in a coffee shop with his laptop everyday, but he is unlikely to read poem or have a poets gathering there everyday. I don’t deny that 15th Ave. Coffee & Tea’s poem reading program may attract some poem fans. However, I would say this target group is rather small and unstable.

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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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