Something about reading about "glittery snow globes" in the same paragraph as the word Starbucks (Nasdaq: SBUX ) got my attention. Although I'm a fan of kitsch (and one can definitely argue that snow globes fit into that domain), the article in question dealt with Starbucks' plans to peddle more non-beverage-related merchandise in its stores for the holidays.
Reuters broke the glittery snow globe news over the weekend. The news agency said Starbucks has made a former Disney (NYSE: DIS ) executive vice president of merchandising to not only lead efforts to boost the holiday-related merchandise, but also to boost employee head count in that mission. Among the products are Christmas ornaments, Advent calendars, and more of the "Bearista" stuffed bears.
I can see the logic here. Starbucks has an entrenched customer base, and many customers are going to hit the store over the holidays no matter what. (Let's face it, most retailers who hope to cash in on the gift-giving season require a little bit more premeditation for customers to enter their stores -- with Starbucks, some customers go in daily.) Meanwhile, I know I've definitely bought my share of stocking stuffers from Starbucks in Christmases past. (The gift card's always a winner when it comes to spreading holiday cheer.)
On the other hand, those of us who are shareholders can only hope that Starbucks' lineup of gift merchandise goes well with the coffee and doesn't distract from the core experience. (Last year, we saw Starbucks come up with some innovative marketing to go with the holiday season.) History shows that although Starbucks does coffee exceedingly well, it's not like the company can do no wrong in retail.
After all, helping market Lions Gate's (NYSE: LGF ) Akeelahand the Bee last spring may have sounded like an interesting and logical idea, but Starbucks' marketing and solid reviews from critics did little to keep the movie from being a box-office disappointment (not too terribly surprising, considering that moviegoers have been fickle in general these days).
And despite the fact that many agree that its musical ventures have worked pretty well for it, let's not forget that back in the '90s, Starbucks went through an ill-fated phase when it thought it could be an Internet company, too. (Thankfully, it dumped that idea in 2000.)
For the most part, though, it seems like the approach could be a winner, if executed properly. Those of us who are shareholders will watch carefully -- of course, hoping that Starbucks always remembers its core focus is, indeed, slinging the caffeine.
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Alyce Lomax owns shares of Starbucks but of none of the other companies mentioned.