Can you stand it? Here is yet another reason to blog about Starbucks. In a recent article in the Seattle Times titled Sneak Peek of 15th Avenue Coffee and Tea, it appears Starbucks may have found yet one more way to kill its ailing brand.
Let's recount here:
Too many stores offering too little service for too high prices watered down the Starbucks image–and the brand's value. Interbrand calculates Starbucks has lost 16% of its brand value due to this, as well as increased competition from specialty coffee shops, McDonald's and Dunkin' Donuts.
Howard Schultz's return to Starbucks as CEO reinvigorated efforts to reposition the brand, first by closing stores for three hours in February to retrain its baristas on how to make Starbucks signature drinks, and how to offer stellar service.
To counter lower-priced coffees in the marketplace, the decision was made to launch VIA ready-brew instant coffee. Instant coffee at Starbucks? Good idea to try to compete with McDonald's and Dunkin' Donuts? Probably not.
The decision to close 600 stores and shelf the opening of 350 more was likely a good idea. Overextended is overextended.
Now comes the news Starbucks is testing a new iPhone app that enables customers to pay using their iPhones. Customers can also manage their gift cards and check and refill their balances. This actually might work. . .
But how about this decision? Starbucks has suddenly made the decision to rebrand some of its existing stores as "15th Avenue Coffee and Tea" shops. Apparently, they want to recreate the flavor they once had of the local coffee shop. Analysts and bloggers are saying that the first trial store in Seattle will get involved in the community and offer tastings.
Starbucks coffee will be served–not under its vaunted brand–but under the 15th Avenue brand. WHAT????
First, I have to believe consumers are not going to be deceived by this move. Especially on Starbucks' home turf in Seattle. . .Secondly, I do have to think they'll be confused. Thirdly, if brand dilution has been such a problem, why would the company take such a step?
I have to ask myself what on earth the Starbucks management group is thinking of! Is this crazy, or what? The brand isn't struggling enough, so Howard Schultz and company decide to finish the job and kill what was once a superstar among brands? Maybe there's something that I'm not seeing here. . .help, please.
What do you think of Starbucks' recent moves? Which ones have merit and which ones will likely fail, in your view?
What do you think of re-branding Starbucks' stores with a new name to recapture the local coffee shop feeling that first launched the Starbucks name? Will it work? Why or why not?
Do you think Starbucks can and will recover from its decline and past missteps? Can it regain its dominance or is the retailer finished?
I'd love to hear from you.
Continue reading "Starbucks: Undercutting Its Own Brand?" ... Read the full article
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