Archive for July, 2008|Monthly archive page

Starbucks Forgot Its Story

As I sit here in my new Seattle home, drinking the latte I made myself, yesterday’s news of more Starbucks layoffs is still fresh in my head. As a former Starbucks barista, the news seems a little shocking. How could a company that is so big and that seemed to be doing so well run into this kind of trouble?

I’ve heard people around here say that Starbucks grew too much too fast. Maybe. But that doesn’t fully capture the nuance of why Starbucks finds itself in this position. With the resources that the corporation has, it could well afford to open the stores it opened–as long as they were as profitable as the old stores. Scaling up the physical business was not the issue for Starbucks. Starbucks ran into trouble when their product wouldn’t scale up that quickly. And, no, I’m not talking about coffee.

If you think the success of Starbucks is about good coffee, you have probably never had good coffee. But that is just it, Starbucks doesn’t exist to serve good coffee to coffee connoisseurs. Regardless of what the too many idiotic business success books say, the core Starbucks story is not about happy crappy employees or good service or customization or even the (gag me) “Starbucks experience.” Taking the coffee shop experience to people who wouldn’t ordinarily go to a coffee shop is what Starbucks is all about–whether or not they know it. And, for a long time, they were good at it.

So, what happened? It’s my guess that, in order to grow as rapidly as they wanted to, Starbucks was forced to dumb down the role of the barista. Part of that coffee house experience that Starbucks sells is a handcrafted drink by a real barista. However, when you replace real espresso machines with fully automated ones, the role of the barista all but disappears. Now, in order to be a Starbucks barista, all you have to be able to do is memorize how many pumps of syrup go into the different sizes of drinks and know how to push two buttons–one for the automatic milk steamer and one for the espresso shots. Starbucks made the process so simple, that the hand-crafting of drinks disappeared. Now, people pay the same price for a fully-automated cup of coffee at Starbucks as they do for a drink made by a real barista in a real coffee house.

You know the process has gotten simple when McDonald’s joins the fray. If all it takes to be a barista is to push a couple of buttons, then why shouldn’t Mickey D’s get in on the profits? Honestly, it will be a cold day in Hell when I get a cappuccino from McDonald’s. However, I must admit the drinks are probably not that different from the over-roasted, often shots-not-calibrated-correctly espresso drinks I sometimes get at Starbucks.

Being more like McDonald’s and less like a iconic Seattle coffee shop is certainly not the Starbucks story that made them successful. I think that they now find themselves at a crossroads. Do they continue to make everything as efficient as possible in hopes of more growth in the future? If they do, the Starbucks brand will be changed. Do they try to remember and recapture that simple story of exporting the Seattle coffee house to the rest of the world? If they do, it will be a more complicated and labor intensive process in order to grow.

Even though I will always choose a local coffee shop over a chain, I hope Starbucks does recapture its story. I would encourage Starbucks to begin to build new stores with the old espresso machines and train the baristas to be real baristas. Maybe they won’t be pouring latte art, but in towns like my small, rural hometown in Tennessee, to have a real barista making a them a great drink would be an education and a treat for people who would have not otherwise experienced coffee in this way. And who knows, maybe those people would become lifelong customers along the way?

Nike Pulls Homophobic Commercial. Should they have?

Nike just pulled one of their new “Hyperdunk” ads that depicted a player dunking over another player. The ad shows the dunking player’s crotch in the other player’s face with the words “That ain’t right.” Nike has agreed to pull the ad due to the outcry that the ad promotes homophobic views.

Nike Homophobia

What do you think? Did Nike do the right thing? Was the commercial irresponsible? Comment below to make your voice heard.

The Marketer’s Dilemma

I haven’t been blogging much lately.  This is pretty much due to the fact that I just spent the last week driving across the country as my wife and I moved to Seattle.  However, I did make pretty good use of the time I spent in the Uhaul truck.  As I drove, I listened to Michael Pollan’s The Omnivore’s Dilemma on audiobook.  I hadn’t intended to use it in my studies.  My intention was to listen to it for pure enjoyment.

As I listened, two things struck me. First, I was struck by the way my route from Tennessee to Seattle coincided with what Pollan was talking about. From the cornfields of Tennessee, Arkansas and Oklahoma to the massive cattle feed lots of Kansas, Colorado, and Wyoming, I seemed to follow the path of America’s industrial eating habits. I hope my destination of Seattle fits with this theme as well, as Seattle is home to a great many farmer’s markets and local food options. However, we, as a society, are a good ways off from kicking our addiction to and dependence on industrial agribusiness and toxic foods.

The other thing that struck me about the book is the parallels between our food choices and our media choices. In particular, I was struck by how similar marketing is to farming. As Pollan described the differences between industrial farming, industrial-organic farming, and the organic movement, I couldn’t help but think about mass media marketing, new media marketing, and social media.

The similarities between industrial farming and mass media marketing are glaring. Both give little to no thought as to their impact on the earth or society. Both are concerned only with profit. At first glance, both seem to be very cost-effective ways of doing their jobs. However, both have costs that are paid, not by those reaping the profits, but by the public. Industrial farming comes with environmental degradation, poor water quality, poor nutrition, etc. These costs are absorbed by society. Mass media marketing comes with increased consumerism, increased dissatisfaction, a greater aversion to media, etc., which all take a toll on society.

On the other end of the spectrum from industrial farming is the organic movement. This movement is focused on sustainability and local foods. Unlike industrial farming, farms in the organic movement tend to take a more holistic approach to farming. Instead of seeing nature as something to be exploited for profit, farmers in the organic movement tend to view nature as a partner that should be worked with for mutual benefit. Social media is much like this. Where mass media sees consumers as a resource to be exploited for profit, marketers who understand social media realize that consumers are now partners that must be worked with. In the world of social media, people are no longer one-dimensional consumers. Everyone is a producer and everyone is a consumer. Marketers who understand social media also tend to realize that, in order for their messages to continue to be heard, they have to take care not to do harm in their marketing. Consumers, just like the planet, are starting to fight back.

Finally, in both food production and marketing, there is a strange middle ground. Pollan talks about this middle ground of food production as “industrial organic.” Industrial organic farmers are those that apply the same mono-cultural practices as industrial agribusiness. They only differ in that their inputs are certified organic. What this amounts to is the use of “organic” as nothing more than a marketing tool. The middle ground in marketing is similar. When corporations start blogging or join social networks or let users create content on their websites without themselves changing the way they present their message, they are using social media as nothing more than a marketing ploy. An example of this would be General Motors creating a site where consumers could generate their own commercials only to have GM take the site down when the messages seemed to be negative. When organizations try to use the tools of social media to broadcast a traditional marketing message, they are playing in that middle ground.

I guess it makes sense, but I am still amazed at how intertwined marketing and farming are. I guess it comes from the fact that modern agribusiness has foolishly adopted the idea that free-market hyper capitalism works in agriculture. When it comes down to it, both in marketing and agribusiness, there are a few huge corporations trying to convince us all to buy a bunch of crap. Eventually, most of that crap will end up killing us.