A rose by any other name would smell as sweet, according to Shakespeare -- but that's not good enough for Starbucks (NASDAQ:SBUX). Apparently, the coffee colossus is hoping that a change of name will help that rose smell sweeter.
The Seattle Times reports that Starbucks plans to rebrand some stores with community-focused names such as "15th Avenue Coffee and Tea." Even more interestingly, Starbucks will wipe its name and ubiquitous logo from these stores; even the bags of coffee for sale will bear the community-based brand.
Starbucks is trying this approach with at least three of its Seattle stores. If the idea pays off, the java giant may try a similar approach in other markets. This initiative should work well with some of the new and improved eco-friendly cafes it's been testing out.
Beyond the simple name change, these stores will serve beer and wine, and host events like live music and poetry readings. None of that can be welcome news for the mom-and-pop coffee shops who must compete with Starbucks. Even though Starbucks was always closer to a traditional coffee shop than the likes of McDonald's (NYSE:MCD) or Dunkin' Donuts could ever achieve, it still couldn't offer the eclectic atmosphere found in many independent java joints. Now the indies may begin to lose even this slim competitive advantage to their massive rival.
Playing the name game is a smart and rather ruthless move on Starbucks' part. The company should try to remember its roots, and add more of the personal touch with customers and communities that make people loyal to establishments. That strategy would help it compete not only against McDonald's, but also more similar rivals such as Peet's Coffee & Tea (NASDAQ:PEET) and Caribou Coffee Company (NASDAQ:CBOU).
However, the "stealth Starbucks" approach could also backfire in a big way. Smart, cynical consumers may be horrified to suddenly realize that their beloved 15th Avenue Coffee and Tea is just one more corporate clone. Consumers don't like feeling tricked or duped. And I'm sure a lot of independent coffee shops would be quite vocal in exposing Starbucks' masquerade.
Besdies, I always think it's creepy when companies change their names to make people forget "that other thing." The new Ally Bank for which I keep seeing ads actually arose from GMAC Financial Services. AirTran's (NYSE:AAI) past as the ill-fated ValuJet is a more ominous example. Starbucks' new idea isn't quite the same thing, but at some point, people may ask what Starbucks is so ashamed of. Perhaps the company's finally feeling bad about building a Starbucks on what feels like every corner?
For good or ill, a Starbucks by any other name is definitely an interesting concept. In the face of flagging customers and more aggressive rivals, I'm glad the coffee chain is trying something new.
What do you think? Is this a great idea, or a possible nightmare for Starbucks? Please let us know in the comments boxes below.
Caution, further Foolishness may be hot:
- An attack from McDonald's
- Hearing Mother Nature's call
- Don't do it!
