With the advent of online shopping, the idea of a physical place – you know, the bricks-and-mortar establishment – took a hit. The business press, pundits, observers, and others lamented the death of physical retail. It appeared as if no physical store could compete with the choice and convenience of online shopping. Even fast food establishments elected to use more technology, less personalization, and fewer crew.
But, as time has progressed, the experiential offerings of a physical retail establishment have made a comeback. There is nothing like the ability to use the five senses, along with common sense, when making a purchase.
Which brings us to the beauty of Starbucks’ turnaround.
Yes, there is the product, the coffee. As well as the aroma. Along with innovative beverage ideas. Yes, there is the service, the baristas. There is promotion, the logo, and the marketing. There is the pricing. But, there is also the place. Years of CEOs who fell for the allure of online, creating strategies focused on speed and push-through, as well as technology, made Starbucks impersonal, generating a soulless experience. The actual Starbucks “place” became a transit hall. A gas station. The Third Place vibe was ditched.
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This has changed now. Place is a focus of the new Starbucks management. Management understands that place is the face of the brand.
In a turnaround, all 8 P’s of a Plan to Win must be addressed. Place is one of these critical action P’s.
Just to recap: a Plan to Win is an aligning, strategic, one-page document that articulates the brand’s 8 Ps: Purpose and Promise; the critical five action Ps: People, Product, Place, Price, and Promotion; and measurement, Performance. A Plan to Win is an essential part of any brand revitalization.
Each element of the Plan to Win is critical. Sometimes, strategies emphasize product or promotion. But, with a Plan to Win, all the P’s must be addressed.
The Action Ps are:
- Promotion— This is about creating an integrated approach to raising awareness, familiarity, and preference for the brand. Promotion includes every communication on behalf of the brand.
- Performance P means designing and implementing a measurement program with annual milestones spanning three years, monitoring progress. These are the metrics that will be used to evaluate progress toward achieving the Brand Purpose and Brand Promise through the implementation of the Five Action P’s.
Starbucks may or may not have a Plan to Win. According to reporting, there is a People strategy aimed at generating “equipped, empowered, and proud” employees. There appears to be a strategy for Product. Innovative new beverages, for example. But, the overarching focus seems to be on Place; place is essential to Starbucks’ success.
In his third stint as CEO, founder Howard Schultz provided a roadmap for a “reimagined” Starbucks’ Third Place. Mr. Schultz recognized that how we live has changed over the past 35 years of Starbucks’ history. But he also understood that the emotional and social rewards delivered by Starbucks were, and still are, critical human needs.
Technology may have enhanced and altered how we behave independently and interdependently, but technology has not changed our driving human needs. Starbucks’ café society experience satisfied our desire to be part of something, to connect while allowing us to be individuals.
In his post, Mr. Schultz suggested that focusing on the channels of how we receive our Starbucks is important but channels are all about the way in which we deliver a brand promise. Starbucks needs to work on making the third place experience contemporary.
In September 2022, founder Schultz said that reinventing Starbucks meant reimagining the Third Place. Starbucks described its brand essence as “delivering experiential convenience, in a way only Starbucks can.” To do this, Starbucks needed to make it easier to work there and easier for its employees to connect with customers and vice versa.
As part of his vision, Mr. Schultz said that elevating the Starbucks’ total brand experience was critical. “The Third Place has never been defined solely by a physical space, it’s also the feeling of warmth, connection, a sense of belonging Starbucks.”
The new CEO, Brian Niccol appears to be a firm believer in the experiential as well. Mr. Niccol seems to deeply understand the idea of Place. Place is more than a space. Place is more than its operations. Place is more than its offerings. Mr. Niccol appears to be moving Starbucks into a contemporary Third Place driven by a sense of warmth and conviviality.
The wonderful southern writer, Eudora Welty, believed place was the anchor when crafting a story. She understood how the powerful description of place grounded a story. She wrote,
“Place has a more lasting identity than we have, and we unswervingly tend to attach ourselves to identity. Experience has ever advised us to base validity on point of origin. Place … is the named, identified, concrete, exact, and exacting, and therefore credible, gathering spot of all that has been felt, is about to be experienced. Location pertains to feeling; feeling profoundly pertains to place; place in history partakes of feeling, as feeling about history partakes of place. Place is seen in a frame. Not an empty frame, a brimming one. Point of view is a sort of burning-glass, a product of personal experience and time; it is burnished with feelings and sensibilities, charged from moment to moment with sun-points of imagination.”
True of writing and true of retail. Place has power.
Mr. Niccol appears to love the Starbucks “place.” His actions demonstrate his commitment to Starbucks thriving as a Third Place. Of course, he sees the financial issues and the shopping issues that are troubling Starbucks. But, Mr. Niccol also seems to understand that fixing the Place which drives the total brand experience, making the brand place beloved, is task number one.
Contributed to Branding Strategy Insider by: Joan Kiddon, Partner, The Blake Project, Author of The Paradox Planet: Creating Brand Experiences For The Age Of I
At The Blake Project, we help clients worldwide, in all stages of development, define and articulate what makes them competitive and valuable at pivotal moments of change. Please email us to learn how we can help you compete differently.
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