It's the Experience, Stupid!

Howard Schultz, once and current CEO of Starbucks, announced that his plan to rebuild the chain's business (the stock price has slide from more than US$39 in 2006 to less than US$19 today) includes a "back to the future" theme of returning to Starbucks' origins as primarily a place to buy coffee.  By refocusing on coffee--grinding it and brewing it--Schultz hopes to recreate the smell and experience of a real coffee store, rather than the variety store Starbucks has come to resemble.  In other words, Schultz wants customers to get the full coffee experience.

As I write this sitting in a very crowded competing coffee store, The Cow's End, in Venice Beach, CA, a Starbucks sits almost empty across the street.  The Cow's End does not sell beans, nor does it do much grinding.  And it has a full food menu, something that according to Schultz is a no-no for good coffee.  And customer stand outside on the sidewalk waiting in line to buy coffee to go.

Why is The Cow's End crowded and Starbucks not?  Well, one could say it's the experience, but a big part of that experience is an emotional connection that Cow's End customers feel with the place (decidedly no-frills) and with each other (it's a place to hang out).  Part of the experience, too, is doing business with something other than a monolithic global corporation--a really big deal in Venice Beach.

Starbucks is correct that their problem is with the experience.  But, Starbucks, like every organization, must remember that the full monty of experience means more than just smells and sounds.