Starbucks Relaunch
It's taken a while, but the turnaround is happening
For a few years, Starbucks seemed determined to prove it could destroy one of the greatest consumer concepts ever created. It had coffee. Comfortable chairs. Good music. Friendly baristas. That wonderful smell. And millions of customers happily paying six bucks for something that costs roughly eleven cents to make.
Naturally, they screwed with it.
Under a hand-picked CEO. who told staff that his phone was off after 5PM, Starbucks became a mobile-order fulfillment center with a bathroom(that was locked). Customers stopped being customers and became order numbers hovering around a pickup counter staring angrily at twelve identical plastic cups.
Meanwhile, the menu evolved into something resembling a chemistry final.
“I’ll have a venti iced blonde oat-milk shaken espresso, two pumps vanilla, one pump hazelnut, light ice, cold foam, cinnamon dust and the emotional support of a barista named Trevor.”
That’ll be $9.14.
Things were bad. SO bad that Founder Howard Shultz had to admit his CEO choice was nothing but "cold foam".
A public switch was engineered and a new CEO, Brian Niccol from Chipotle, showed up and introduced his revolutionary “Back to Starbucks” strategy.
We were leery of Niccol in the beginning and we wrote about it. I mean, the guy was still living in Orange County California and ‘commuting’ to Seattle on the company’s jet. Ugh.
BUT…Niccol seems to know what he is doing, jet time aside.
U.S. comparable-store sales jumped 7.9% in the latest reported quarter, with transactions up 4.2%. North American comparable sales rose 8.1%, and Starbucks has now posted four consecutive quarters of positive global comparable-store growth.
Apparently, Americans didn’t hate Starbucks. They hated what Starbucks had become.
The company is bringing back comfortable cafés, adding more than 25,000 seats, improving staffing, simplifying operations and attempting to make baristas seem like hosts again instead of air-traffic controllers for Frappuccino’s.
Imagine the board meeting:
“What if people could actually sit down?”
“My God, Johnson. Get McKinsey on the phone.”
The comeback proves something luxury brands (and frankly most of corporate America) constantly forget: customers don't always want innovation. Sometimes we want the thing we originally liked.
Starbucks was once an affordable little indulgence. You walked in, smelled espresso, heard decent music and sat in an oversized chair pretending you were more interesting than you actually were. It worked beautifully.
Brian Niccol deserves enormous credit for recognizing that Starbucks didn't need to reinvent coffee. It needed to stop reinventing Starbucks.
So yes, Starbucks is back, because someone finally remembered the winning formula:
Good coffee. Nice people. Comfortable chairs.
Thank-you Brian. Now move to Seattle.
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