Humanoid Robot to Solve China's Demographic Problem?

[syke6]

@MarkR

Now, if they want to shift back, at least somewhat, to the “in store” experience, that’ll increase the footprint, increase the number of employees, and slow overall service. That’s the hard place.

To Howard Schultz’s great credit, he nearly single-handled invented coffee shop culture in the US, and exported it to quite a bit of the world too. Starbucks is a big hit in Italy. He really focused on creating a third place, where people would go just because. And it worked.

He also instituted a culture of juicing growth in order to prop up the stock price. Almost all of Starbucks problems throughout time can be traced back to cutting corners/dumb decisions trying to juice the quarterly numbers. Schultz should have decided that Starbucks was no longer a growth stock and gone to sleep peacefully at night on his giant Scrooge McDuck-style pile of money.

The obvious solution would be to have the Starbucks brand focus on the quality third space experience and create a second brand that focuses on mass production. And a while back they did just that. Starbucks bought a local chain called Seattle’s Best, that had lower prices and less fancy stores. Seattle’s Best also had a pretty good origin story that Starbucks marketing department sent down the memory hole because Seattle’s Best pre-dated Starbucks. We all know Starbucks is the original roaster in Seattle, right?

But Starbucks never really pursued it the dual brand strategy and eventually sold off Seattle’s Best. I think this was a strategic mistake.

As a complete aside, Bill Gates Sr. was instrumental in helping Howard Schultz obtain his initial financing in 1987. In a small town like Seattle it is all about who you know.

[MarkR]

@syke6

Starbucks is a big hit in Italy.

But it isn’t a big hit!!! Not at all. Starbucks only has about 36 stores in Italy.

I used to spend a lot of time in Italy (on business), and they take their coffee very seriously there. And they ONLY drink good coffee, they don’t bother with mediocre coffee. I can honestly say that the coffee I got daily (or twice daily) from the coffee vending machines at the office (or at the subway station) was better than almost all the Starbucks coffee I’ve had.

[Goofyhoofy]

@syke6

Starbucks sales have been declining. Former CEO Howard Schultz pointed out that the in-store experience is the whole point of Starbucks and focusing on the app is killing it. Management responded by doubling down on the app.

I think it’s fair to say “times change.” Schultz have have hit the zeitgeist with his “3rd place” in the 90’s, but I wonder if that’s still a thing. 70% of Starbucks’ business is now at the drive thru; in the 90’s they didn’t even have drive thrus. (This is not dissimilar to what the fast food emporiums have experienced. While there were other versions of “drive thrus” even in the 40’s, it wasn’t until the 70s that one McDonald’s franchise installed them (near a military base where soldiers were not allowed to exit their vehicles in uniform).) They did not become a thing until 1987, and it took a while for them to spread to locations which hadn’t originally been set up for this sort of thing.

Anyway, it’s hard to see how Starbucks grows doing less volume at higher prices in pursuit of the elusive “3rd place” customer, but maybe.

Meanwhile, yes, the kiosks are atrocious, but so are the apps. It takes for freaking ever to order if you have the slightest variation from standard. Assembling a sub at Subway takes you to at least 10 screens; Dominos is “dough” and “sauce” and “cheese” and “toppings” and I don’t remember what-all-else. Humans get it all in a 30 second conversation, it takes several minutes to complete an order on the app.

Of course that’s MY time, not theirs. It’s like the decision-tree on a phone (“Press 1 for…”) That wastes MY time, but the don’t have to pay someone to route the call to the right person in the first place. “More efficient” for them, worse for me. The ensh!tification of business writ large. Again.

@MarkR

Is the app better? Probably is, because it can be updated at will and almost immediately at very low cost.

No, it’s no better. They can update the kiosks just as easily, remotely from HQ if they want. I’ve watched them change the menu boards at Dairy Queen overnight. (Yeah, I go there too often.)

@syke6

The obvious solution would be to have the Starbucks brand focus on the quality third space experience and create a second brand that focuses on mass production. And a while back they did just that. Starbucks bought a local chain called Seattle’s Best, that had lower prices and less fancy stores. Seattle’s Best also had a pretty good origin story that Starbucks marketing department sent down the memory hole

I too thought that was going to be the strategy. (I’ve followed SBUX since the 90’s, where I made a pile of money on it. Been out ever since.) Then came Peets, and I thought “Wow, flanking brands on both sides.” And they’ve done nothing with them.

I’ll stay on the sidelines, thanks. They made a big change in culture 20-30 years ago. Since then it’s just been a middling food service retailer, albeit with somewhat better margins.

[captainccs]

@syke6

Starbucks is a big hit in Italy. He really focused on creating a third place, where people would go just because. And it worked.

According to Google Maps there are six Starbucks in Porto and one in Vila Nova de Gaia. The one in Gaia is at a super-luxury shopping mall, Corte Inglés, near where I live. Tesla had their showroom there five years ago.

Market penetration is a drop in a bathtub.

The Captain