Hot off the presses, blog site Starbucks Gossip has published a link to Monday's Wall Street Journal article just published on February 26th. The WSJ article, "Starbucks Stirred to Refocus on Coffee," centers on a memo that Chairman Howard Schultz sent to executives company-wide on February 14th.
In the memo, Mr. Schultz warns that Starbucks has strayed too far from its roots, and that the customer experience has suffered. He also concedes that fast-food chains and other coffee chains threaten to "steal Starbucks's customers."
The authenticity of the memo was confirmed by a Starbucks spokesperson. In it, Mr. Schultz stated:
"Over the past ten years, in order to achieve the growth, development, and scale necessary to go from less than 1,000 stores to 13,000 stores and beyond, we have had to make a series of decisions that, in retrospect, have lead to the watering down of the Starbucks experience, and, what some might call the commoditization of our brand.
"Many of these decisions were probably right at the time, and on their own merit would not have created the dilution of the experience; but in this case, the sum is much greater and, unfortunately, much more damaging than the individual pieces."
He then went on to enumerate examples of ways in which the brand has become watered down. Mr. Schultz stated that the move to "flavor locked packaging" may have rendered the scooping of fresh coffee beans from bins and grinding them in front of customers unnecessary, "...but at what cost," as he put it. "The loss of aroma, perhaps the most powerful non-verbal signal we had in our stores."
Mr. Schultz then cited how the use of automatic espresso machines "solved a major problem in terms of speed of service and efficiency. At the same time, we overlooked the fact that we would remove much of the romance and theatre." Starbucks's baristas used to manually pull espresso shots for its customers. Mr. Schultz considers this move "even more damaging" since customers could no longer see their drinks being made, nor could they enjoy an "intimate experience with the barista."
Schultz also decried changes in Starbucks's approach to store design, citing they no longer have the "soul of the past," and stating that stores have been described as sterile and cookie-cutter. He observed that the proliferation of new competitors is mostly the fault of his own company, and that these competitors have now courted the loyalty of customers who had previously been Starbucks customers.
Mr. Schultz unequivocally states that "This must be eradicated." He then urged his executive team on with these words:
"Let's be smarter about how we are spending our time, money and resources. Let's get back to the core."
Starbucks spokesperson Valerie O'Neil summed Mr. Schultz's memo up as "a reminder of how success is not an entitlement. It has to be earned every day. We can't embrace the status quo."
Moral of story: Increased competition is always just around the corner.
What's more:
Any dilution in providing great customer experiences leave the door open for competitors to buy their products or services elsewhere.
Smart executives monitor their businesses and once they identify their shortcomings, they rally the troops to "get back to the core."
They eschew the idea of sinking into complacency, or allowing their offerings to become commodities.
And they realize that they have to "EARN IT" as John Houseman famously said, every day. Enough said.
p.s. Brand Autopsy's (and former Starbucks marketer) John Moore asks: "What should Starbucks do to reclaim its uniqueness? To better connect with customers? To become the coffee company it once was?" He's compiling the answers into a free ebook, so email him with STARBUCKS in the subject line and offer him your wisdom.
