Customers Rock!

A blog about customers, their experiences, and how businesses can make sure their customer experiences rock!

Starbucks and Store Closings: How will it affect the experience? Update 8

Posted by Becky Carroll on July 3, 2008

Custom latte photo from Starbucks
Custom latte photo from Starbucks

Starbucks recently announced they will be closing 600 domestic stores, which will mean Starbucks partners at those stores will be “placed” at other stores or let go.  Reactions to this announcement are varied, and they include John Moore’s post on the need for Starbucks to “prune” (which he wrote last year and is still relevant today), Jay Ehret (my partner in the Re-Experiencing Starbucks project) and his post on the commoditization of Starbucks, as well as partner discussion over at the Starbucks Gossip blog about who will stay and who will go.

Here is the official word to customers from Starbucks as part of their press release on the closures: 

Starbucks will reach out to customers who are impacted by the store closures in a variety of ways including directing them to the Starbucks Store Locator at http://www.starbucks.com. Customers who have questions or comments on any store or their Starbucks Experience may contact Starbucks Customer Relations via the web at www.starbucks.com/customer/contact.asp.

Until the store closings are announced to the partners, the Store Locator won’t help (I checked for my area, and nothing has changed yet).  In the meantime, customers appear to be reaching out to Starbucks about their favorite locations.

Customers Want to Help

Per feedback from some Starbucks baristas in the comments at the SB Gossip blog, there are customers who are asking what they can do to help [clarifications in brackets added by me]:

“Every customer who asked today wanted to know what they could do to ensure my store wouldn’t close. (That’s like 50% of the cafe, and 80% or the DT [drive thru] customers).

My DM [manager] was in house, working on his computer when a couple of the folks asked, so I pointed them to him. He, and they, were more than happy to have the discussion.”

Customers are even reminiscing about the Starbucks they have visited and are offering suggestions of which stores to close/open on MyStarbucksIdea, the Starbucks customer community:

On memories:

“I have traveled much of the US for work and pleasure and have visited many of your locations. I have many fond memories at your locations in Seattle, San Fran, Atlanta, and NYC and interested in knowing if they closed without having to go through the list (as they are long and remembering some addresses is difficult.)”

On which Starbucks to cut:

“Close the stores in Safeway and Target and open another drive up store on West Main – Close the drive up store in Bloomfield, NM the drinks there are sub standard and so is the service. “

The Customer Perspective

From the customer perspective, the Starbucks experience is as much about the people as it is about the coffee.  As I have said before, the people make the difference.  Will customers follow their favorite baristas to their new assignments?  What if they go to a competitor?  Relationships built up with people count for a lot – we build trust with other human beings, not with a company.

It remains to be seen whether these closures will impact the customer experience in a negative way.  If going back to the customer experience is really what the Starbucks “Transformation Agenda” is about, then one wonders where increasing the number of store closures fits in.  If the stores that remain open are staffed to the proper levels so customer service doesn’t suffer, this may help the experience in the long run.

Per John Moore, pruning is important for the health of a plant (or a business).  It allows for new growth.  I agree with you, John, and I am glad to see Starbucks focusing on their key business, including those stores that offer the most success to the company. 

However, too much pruning, or cuts in the wrong places, can severely damage the plant.  What remains can be ugly.  I am trusting that Starbucks is not going into “cost cutting” mode (and I hope you are right, John, that they are not) but is truly using the shears as part of a long-term strategy for business health and happiness.

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8 Responses to “Starbucks and Store Closings: How will it affect the experience? Update 8”

  1. GL HOFFMAN said

    Good points, Becky, and I hope the store closings will give a needed boost to starbucks. Sometimes, the act of pruning sends a very clear message to a lot of people and audiences.

  2. Great post Becky! I think the move to close down stores was inevitable for Starbucks. Their rate of growth seemed unsustainable and their current financial problems and restructuring reflects that. Briefly reading over the press release, the number of employees released was quoted at 7%. I don’t find this as a significant portion of the Starbucks workforce, and am confident that the best baristas from those locations will be relocated.

    This “pruning” as you and John describe it should help improve the overall customer service and be beneficial in the long run. Where I live, there is an intersection that has 4 Starbucks; one on each corner. Trimming 7% of the staff from those 4 locations would not have a significant impact on the quality of service, but would probably help to improve the quality of the remaining baristas.

  3. GL, thank you for your comment. I am definitely hoping that Starbucks succeeds in what appears to be a long-term initiative to strengthen the company. Great to see you here at Customers Rock!

    Joseph, good to see you here again, and thanks for the compliment. :) I agree that the growth was too fast, and there are too many Starbucks around (including those pesky “franchise” stores inside airports and grocery stores which don’t seem to help the brand). We will continue to watch through the ReExperiencing Starbucks project and see what happens.

  4. Paul said

    For many Starbucks customers, the experience is important enough that (if the experience survives) they would continue to go and pay higher prices just for that. However, that is at best a large minority or small majority of their customer base — I’m guessing between 40 and 60 percent of all patrons.

    But the reality is that the experience will suffer through these closings (like any company going through downsizings, the employees are less focused on their jobs and serving customers, and more focused on whether they’ll have a job tomorrow and corporate gossip). If the employees are de-focused, no amount of training and corporate rah-rah will fix that. If no other shoes drop, this will take 18 months to work out of the system and for morale to start to improve.

    Moreover, some of the changes that Schultz has already announced will further diminish the experience. No customers asked for the new proprietary Mastrena espresso machines to be developed. Ultra-automatic machines take control away from baristas (not that they had much with the Verisimo machines), and the only advantage is with a lower profile, you can see the baristas face. But if tuning is necessary to get the coffee right, too bad for the consumer. It will always be the same, good or bad. Only reintroduction of manual or semi-automatics in busy locations could restore that part of the experience (i.e. better quality coffee and heightened sense of theater.)

    The truth is that Starbucks is undergoing market disruption. This is not about the economy, its about getting back to basics and finding an effective response to new competitors with serious market clout and lower prices. You can read more on my take here: http://www.anti-marketer.com/2008/07/has-starbucks-g.html

  5. I think Paul nailed it, not that morale has been great anyway. Starbucks has a relatively high turnover rate to begin with. I think the customer perspective on Which Stores to Cut highlights a bigger problem that I think Starbucks needs to deal with and that is the fact that “licenced” stores simply do not deliver the same experience as the company stores. If the company stores were to do everything right, these stores would still be out there doing things a little differently and that is going to be reflected in the opinion the average customer has because, to them, they are just “Starbucks”.

  6. Paul, thank you for your thoughts on this experience. Yes, both consumers and Starbucks partners will be affected by these closings for some time to come. What might really help Starbucks would be to enlist that “large minority or small majority” of their customers to go out and really evangelize the experience they love to others. In this economy, that may be the only way for Starbucks to break through the noise and get back to being the “third place”. Great feedback, Paul!

    Doug, I have been frustrated by the “licensed” stores in the past as well. They detract from the Starbucks brand when the customer experience is less-than-stellar, yet customers view them as Starbucks. They may get more coffee sold, but is that beneficial to the brand in the long term? Probably not if the brand is trying to bank on the customer experience. Thanks for bringing it up, Doug!

  7. rama said

    I am barista Indonesia, I just want know the true of this gossip!
    cause I don’t believe that starbucks is close.so what do say Becky?

  8. [...] Starbucks Closings Raise Questions Written on July 3, 2008 by Jay Ehret in Customer Experience, reexperience starbucks, Starbucks 0Becky Carroll of Customer’s Rock! is my partner in the reExperience Starbucks project. Please check out her post: Starbucks and Store Closings: How will it affect the experience? [...]

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