Post of the Day
July 7, 1999
Starbucks Corp Folder
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Subject: Re: Benefit of the doubt -- for now
"how will this reckless pursuit of new, expensive, non-coffee-related items work when the economy eventually slows? When inflation kicks America in the head again -- and it's only a matter of 'when', really -- are people going to be clamoring to buy $4 coffee, much less cheesy CDs from Rhino?"
Absolutely right about the CDs, and so far I have my enthusiasm for Joe magazine in check. Maybe right about the website, too. Since plopping coffee shops all over everywhere seems to be the company's strength, I have doubts about a strategy that encourages people to stay home and buy coffee over the web. Starbucks might do better to encourage people to go to their local Starbucks, because, well, once you're there to get a pound of beans you might as well get a triple half-caff mocha venti caramel capo for $11.50, or whatever.
That said, Starbucks has the money to experiment and they should. Some of their experiments will consistently lose money, but it won't kill them. (God, I could use a New Coke.) They just need to drop those experiments and try others.
I still think the franchise is spectacular. With all appropriate reservations about anecdotal evidence, at my local Starbucks and most others I've wandered into, the manager seems to know some of the customers by name, the stream of kids who cycle through behind the counter seem friendly and helpful, even during some insane coffee stampedes (and if they don't seem that way, turn immediately to the manager and point the finger at him or her)(oh yeah, and if you are in a Starbucks when a thunderstorm rolls up, run shrieking from the store because even though the kids behind the counter are mostly a pleasure, several of them have enough metal poking from their ears and faces to suck all the electrical charge from the air for a square mile). Anyway, people in the Starbuckses I visit can't seem to spend their money fast enough, they wait in lines 10 and 12 people long to get a cup of expensive coffee, and I have never ever seen a Starbucks empty, day or night. Maybe it's the color scheme, I don't know, but people like to go there, which is the best possible news for a retail outlet.
Finally (whew), at least according to me, their coffee is simply better than most and very hard to give up once you've grown accumstomed to it. Lots of comments I've heard from other people about Starbucks begin with "I got hooked on that when I was in . . . " or words to that effect. Maybe they have crossbred coffee plants and poppies, I don't know, but I can't think of another product recently that has inspired as much loyalty. When inflation hits, I think the first thing lots of people will do is scurry down to Starbucks to get their coffee before the price goes up any higher. But I agree they won't be buying any CDs or gourmet aprons or such.