by Freddy J. Nager, Founder & Fusion Director, Atomic Tango LLC
Three yuppies walk into a Starbucks. Sounds like the beginning of a joke, and in a way it is. Two claim a table, while the third goes to order. He asks the others what they want, and they both say “nothing.” He responds, “So why are we here?” One replies, “Someplace to talk.” The first guy scowls and says something that makes me want to high-five him…
“That’s gonna put them out of business — people like you.”
I look around. This West L.A. Starbucks is packed at 1 pm with people waiting for seats — it’s one of the lucky stores in the hurting chain — but I see an old guy without a beverage napping in a chair, and a young woman at a table eating salad from Tupperware and drinking O.J. from a gallon jug she obviously bought elsewhere.
Since I’m a business guy who values what Starbucks offers, these sights make me more steamed than Dante’s cappuccino. I take my coffee and leave.
In another establishment, a manager might tell these freeloaders to hit the freeway. But this is Starbucks, and founder Howard Schultz envisioned a “third place” where people could linger and meet outside of work, school and home. Notes the Starbucks mission statement:
“When our customers feel this sense of belonging, our stores become a haven, a break from the worries outside, a place where you can meet with friends. It’s about enjoyment at the speed of life — sometimes slow and savored, sometimes faster. Always full of humanity.”
Oh, the humanity. I can’t imagine this is what Schultz had in mind.
Now, we can point to several reasons why Starbucks’ stock has declined: absurd overexpansion, intensified competition, ill-advised ventures into filmmaking, and premium prices that no longer fit most budgets. Starbucks responded by shutting down underperforming stores, withdrawing from the movie biz, increasing its advertising, and offering lower-priced options like Pike Place Roast. All laudable efforts.
But if patrons are now hanging out without buying, all those efforts won’t amount to a hill of roasted beans, and that can mean only one thing: Hasta la venti, baby.
What can Starbucks do? Some ideas…
- Follow the Italian coffee shops (the source of Schultz’s inspiration) and charge $7 per cup to compensate for all-day hangers. But Starbucks has already suffered a revolt by the price sensitive, and raising prices would only punish the legit customers.
- Pull a Web 2.0 and “monetize that traffic” by selling ads in its stores. I’ve seen other coffee shops do this with ad-sponsored TV screens. But just as advertising isn’t floating too many dotcoms, I don’t think flashing ads will make a difference while people are chatting, reading or napping.
- Take a stand — or more exactly, compel customers to do so literally — by taking away chairs. It’s working in some classrooms, where teachers are finding that students are more alert when they stand instead of sit. That would eliminate the snoozers and the lunchers — and some legit customers as well — but it would make room for lots of standing-only tables…
At the least, before taking any of these measures, Starbucks should just ask customers to drink up. Little tent cards at every seat could pose a friendly reminder:
“Thanks for visiting us today! We’re thrilled to have you here savoring our little home away from home. Nice, huh? Now we hope you’ll help us keep going by trying one of our gourmet coffees — we’re sure you’ll enjoy every drop! But if you’d rather just hang out all day without buying anything, our cousin Guido will soon come along to keep you company. After all, we wouldn’t want you to be lonely here, and he’ll even make you an offer you can’t refuse! If he seems really eager to have you drink some coffee, it’s not personal — it’s strictly business — and we wouldn’t want to upset Guido now, would we?”
Update 8/6/9: The backlash has begun. While Starbucks is still generous, other coffee shops are taking a stand against freeloaders.