Published on: September 18, 2009Notes & comments from The Content Guy
SEATTLE -- Back in July, Starbucks made a bit of news when it opened the 15th Avenue Coffee & Tea format, a stand-alone store that, except for a small “inspired by Starbucks” sign, bears none of the traditional branding accoutrements of the giant coffee chain. The store, which is a renovated Starbucks unit, serves wine, beer and sandwiches in addition to coffee and tea, and seems to be an effort to see whether a different marketing approach can work for the company.
The experiment hasn’t been universally applauded; no less a critic than HarvardBusiness.org has called the format essentially dishonest and “doomed to failure, because there's no way a corporate coffee chain can create an authentic neighborhood coffeehouse experience … Your favorite local coffeehouse is the product of someone's passion, dedication, and probable borderline craziness. 15th Ave is the product of corporate product design and development.”
Well, I may not have the credentials of HarvardBusiness.org, but let me disagree a little bit.
While in Seattle this week, I stopped by 15th Avenue Coffee & Tea, and found it to be a pretty cool concept. It has a local, neighborhood feel, with less of the polish that one expects – it doesn’t seem mass-produced, and one gets the sense from the employees that they have a different kind of skin in the game. There are big community tables, enormous murals that seem like they were discovered in some local gallery rather than being mass-produced by Starbucks’ design department, and a small but nice selection of six wines and seven beers, plus a number of sandwiches and snacks (not the pre-packaged stuff sold at Starbucks). They also have “daily cuppings” every morning, which is sort of like the coffee version of a wine tasting, which is a nice little touch.
I had a great turkey sandwich on whole grain bread, served on a pewter plate, and Red Hook Slim Chance beer, which was perfect on an unseasonably warm September day. The only thing that annoyed me was that the store continues what has become a Starbucks pattern in its newest stores, listing the products on the menu boards without listing the prices.
But what about the business case?
While it is true that 15th Avenue Coffee & Tea is kind of trying to hide its true identity, I think there is something else going on here. In Seattle, where coffee courses through people’s veins rather than blood, I suspect that they aren’t fooling anyone – there are coffee shops on pretty much every corner, and people are hooked into the coffee scene in a way they aren’t in most cities.
Rather, I think this is Starbucks trying to figure out how to expand in new and different ways. Even great brands can bump up against boundaries at one time or another, and finding a new vehicle for growth can be a smart thing. I can imagine that down the road, after the format has been tweaked and adjusted, Starbucks could find a way to license or franchise the 15th Avenue format around the country. It could exist under a variety of names under local ownership all over the country. It could provide growth without damaging the main brand…the same way that Starbucks seems to be using its Seattle’s Best Coffee brand as a different way of growing.
Interestingly, Fortune has a piece from author Kevin Maney – adapted from a new book, “Trade-Off: Why Some Things Catch On, and Others Don't” - in which he discusses where Starbucks has gone wrong in recent years. He suggests that it has happened because Starbucks got caught betwixt and between as it tried to become more convenient even as it tried to show fidelity to its core experience and value proposition.
“Consumers are willing to give up convenience for great fidelity, or ditch fidelity for great convenience,” Maney writes. “But anything that offers just so-so fidelity and so-so convenience falls into a no-man's-land of consumer apathy that I call the fidelity belly …
Remarkably, the most successful products and services tend to be either high in fidelity or high in convenience -- one or the other, but not both. In fact, products attempting to be both typically end up with a confused brand … This impossible place of both fidelity and convenience is something I call the fidelity mirage. And Starbucks chased it big-time.”
Is the 15th Avenue concept a way for the company to try to recapture its mojo and get in touch with its past, after a time when CEO Howard Schultz seemed obsessed with growth and stock value? Certainly. Will it work? Hard to say.
But you don't learn if you don't try.
While I was skeptical about the concept when I first heard about it, a visit made me think about the format in different ways. We always say here on MNB that it is critical for companies to try new things, to find new approaches to business that will allow innovation and imagination to flower. To use the cliché, it’s out-of-the-box thinking. Give them credit for trying.
- KC's View: