In a famous book Cultural Strategy, Holt&Cameron define Starbucks as an Accessible Coffee Drinks brand by explaining how Starbucks democratised artisanal Italian Coffee culture and made it accessible to masses (Like Ikea did in furniture design or Zara/Mango/H&M did in fashion). So every detail from interior design to products/assets’ names (frappuccino, doppio barista, etc), from having your name on your cup to music choices- Starbucks is there to put some sophistication into your life and pamper you a little on a comfy chair.
Besides acknowledging the genius, Holt&Cameron states many mistakes Starbucks -and especially Schultz- have made on the way to this grandiose success, as well. They think that Starbucks’ trickled-down approach to bring some elite into our daily coffee routine started to suffer after 90s. Briefly, the authors believe that Starbucks could not follow the trends that affect its clientele‘s tastes and preferences, but on contrary behaved like a fast-food chain and started to appeal to the “average” consumers with some goofy product choices. That means it became ordinary… It became -kinda ‘meh’- for the people that made Starbucks a success. It might have been too much of an inclusiveness for some people and they started to go away… Claims the book.
In my opinion, this is not necessarily a fatal problem. Globalisation brings some consequences and if you choose to go big, you eventually need to make peace with being “ordinary” and answer to average expectations with an average price. Hence, no matter how massive Starbucks company gets, the brand can still be very coherent and very loyal to its purpose. Inclusivity can change the standards of your services, and obviously your customer profile, but you still can serve in consistency. Think about Facebook!
And even today, Starbucks does not serve cheap coffee or offer economic combo menus. Because those would never fit the affordable luxury experience you want to have in a Starbucks. But “free wifi” is a very appropriate emotional promotion to make you feel more welcomed. It is a way to sustain that little pampering experience in-store and keep being reasonably affordable… Though it might not be enough. Anyone can open a cool & comfortable new cafe, give free wifi and a new drink on top. And your new clientele may just start to go there.
Because they do not know what Starbucks stands for. And the old story of being a “third place” is not that relevant to them. They are not the “lucky” people who would go there, hang out with their iPhone 7 for hours and enjoy the freedom to choose Ethiopian coffee over Colombian coffee sometimes. They did not go there to experience that artisanal cosmopolitan coffee culture at the first place. They went there because it felt good. The chairs were comfy, the coffee was nice, the people were cool. But do you think that they would prefer to keep coming just because they love to say grande or venti?
What was your brand story anyways?
This question is very critical to understand the situation today. Starbucks is not like Ikea. Ikea was never ever elite or pretended to be sophisticated. Or neither like H&M, H&M started cheap then added some posh, “designer” feeling… So they always had the affinity with their consumers and the consumers appreciated to have products with high design value with an affordable price. They were the Robin Hoods for ordinary people. Starbucks’ coffee was affordable only when it was compared to niche, artisan coffees, and that was appealing to the old consumer profile. The new clientele can find cheaper coffee elsewhere and they would not mind the little difference. It is just a coffee!
So Starbucks either needs to keep “cool” as a space as long as it can or start to tell a story that would resonate. And regarding the three major Social Media crisis they went through just in one year, I suggest that they’d better rephrase their brand purpose and start communicating it in a relevant way immediately. Let’s remember them:
1. The holiday cup incident: After long years of having a Christmas themed holiday Cup, last year they decided that it is not that “inclusive” since we are not all Catholics and they had a very plain Holiday Cup without ornaments. And of course, making such a delicate change pissed off some people. They did not know what was going on: Why did Starbucks have Holiday Cups before, why not now? No explanations. Starbucks was not ready for this reaction, and they could not prevent a Social Media crisis. They just published a low-key statement that nobody could hear except the ones that heard it from Ellen. Also Starbucks lovers were there to help, too. And they tried their best to support their brand.
I do not know if Starbucks has contributed seeding #itsjustacup or paid Ellen to help them to spread the word, if so, they were both smart as reactive tactics. However, the communication strategy about the new cups was a disaster and caused a damage.
2. #RaceTogether scandal: Just after four months, Starbucks did something bolder -well, maybe crazier. No matter how good the intention was, it was a communication scandal. If you do not know the details, I urge you to read the back story from FastCompany, and the hilarious reaction of Washington Post. Because this would be thought as a case study at universities until forever.
Briefly, as a concerned citizen, Schultz decides that he can do some good about racial issues after two African American people got killed for no reasons. He wants to enable a social change via making it openly discussed everywhere, collaborates with USA Today and starts a campaign. So he asks his baristas to write #racetogether on coffee cups to ignite a conversation offline with consumers, and uses mass media to invite people start the discussion online. They even prepare these crazy conversation starters, assuming that we did not speak about this subject for so long years, just because we did not know where to start from.
So people got furious. It was a disaster on all levels:
1. Starbucks had no license/credentials to talk about a subject of inequality. They had no participation on this topic before and it felt opportunistic.
2. The baristas were neither ready nor willing to have a chat about such an issue with strangers.
3. The implementation of the campaign was horrible: it was premature, amateur, irrelevant… Exactly like this SNL’s parody.
Mr. Schultz is definitely a strong character and I believe that he felt the urgency to do something about it, and at least make it a topic in Starbucks. I honestly respect that idealistic courage and I am glad that he tried to do something good. However, it is not Schulz foundation with his name on it, it is Starbucks! And if your leader is impatient, then you’d better develop a team that can interpret his intentions well and make them a little bit more digestible for the “average” people.
3. Green Cup misunderstanding: Recently, Starbucks launched a thematic green cup designed by Shogo Ota to celebrate the idea of Unity before the elections. But again, they did a miscalculation. Since the holiday season is coming, people thought that it is the new Holiday Cup and hated it… Of course there is a minority loving it on the other side. They either got the intention immediately (without help) or they are following Starbucks on Social Media.
I do not think that this time it will cause a big crisis like the two above, it does not seem to be provocative. However, it made people remember the case about last year’s holiday season and made them build expectations for the new Holiday Cup. So whatever Starbucks does this year, it will either disappoint the people that are expecting the snowflake cups back or contradict to last year’s statement.
So we might expect another burst of negative buzz around Starbucks. And this may have a cumulative effect on Starbucks’ brand health metrics.
In my humble opinion:
1. Before designing another new initiative, Starbucks has to focus on some corrective actions. Just analysing the mistakes that were done last year, developing some proactive actions and improving the reactive tactics are more than enough. Use the same/similar cup, but do not seem confused!
2. In parallel, they need to craft a story and a narrator that would be relevant to ordinary coffee drinkers. Starbucks obviously does not want to be a comfortable place or a nice coffee drink, but a hero! Then Schultz and his team need to define what this hero stands for. And define what does it have to do with coffee.
UPDATE (Nov, 16): Schultz was a H. Clinton supporter, and here’s is his letter -on Starbucks’ website!- after the elections
UPDATE 2 (Nov, 16): Post-Trump Starbucks Holiday Cups are here.
UPDATE 4 (FEB, 17) Schulz’ letter about hiring 10k immigrants globally triggered another boycott