Nikhil Ahlawat’s Post

Starbucks : a dilution of the brand experience and a waning focus on innovation. What was once a haven for relaxation and community has morphed into a fast-paced, transactional environment. #Insights Increased competition has forced Starbucks to adapt, but perhaps at the expense of its core identity. The Third Place Concept: #Starbucks pioneered the "third place" concept - a space between home and work where people can relax, socialize, and enjoy high-quality coffee. As the world becomes increasingly digital and remote, the importance of physical gathering spaces is evolving. Heather Haddon 's piece on the state of Starbucks is spot on. The once-inviting coffee shop experience has transformed into a chaotic assembly line, thanks in large part to the surge in mobile ordering. The app has undeniably boosted sales, but at a steep cost. Store congestion, overworked baristas, and a decline in customer satisfaction have become the norm. Founder Howard Schultz is acutely aware of the problem, and new #CEO Brian Niccol has a daunting task ahead. Travis Kalanick and his company, CloudKitchens. In a potentially game-changing move, Starbucks and CloudKitchens have partnered to alleviate the in-store chaos. By shifting a significant portion of order fulfillment to off-site CloudKitchens facilities, Starbucks is aiming to: Free up store space: Reduce crowding by eliminating the preparation of to-go orders in-store. Improve barista focus: Allow baristas to concentrate on in-store customers, enhancing the overall experience. Streamline operations: Optimize order processing through dedicated CloudKitchens facilities. While this strategic partnership is still in its early stages, the initial results are promising. By separating the digital and in-store experiences, Starbucks may be able to recapture the magic that once defined the brand. Whether this innovative approach will be enough to truly save Starbucks remains to be seen. However, it's clear that the company is taking bold steps to address its most pressing challenges. #retail #starbucks #cloudkitchens #Retailnews The Wall Street Journal #retailing #strategy #ceo #innovation #Starbucks #Marketing #Brand #Strategy #cmoinsights #Retailnews #Leadership #recruitment

WHAT'S WRONG WITH STARBUCKS? PRICES UP, WAIT TIMES LONG, AND A NEW CEO FACES MOUNTING CHALLENGES Starbucks is facing a series of significant challenges, from rising prices and longer wait times to growing competition, especially in China. Customers are feeling the pinch as prices for their favorite drinks continue to rise, leading to a drop in U.S. orders. The shift toward app-based ordering has transformed the in-store experience, often creating chaos and longer wait times. This has led some customers to seek alternatives, citing Starbucks as a luxury they can no longer afford. The new CEO, Brian Niccol, known for his success at Chipotle, has been brought in to address these issues. However, many challenges, such as the economic environment and increased competition, are beyond his control. Additionally, Starbucks faces difficulties in China, where local competitors like Luckin Coffee are rapidly gaining market share with lower prices and faster service. Starbucks' reputation has also been a double-edged sword, drawing both loyalty and criticism. The company's cultural involvement, from offering employee benefits to engaging in social issues, has made it a frequent target in the culture wars. As Starbucks adapts to these pressures, its strategies include promotions to improve value perception, investments in store redesigns to handle app orders, and exploring strategic partnerships in China to regain its footing in the market. REFERENCE: Haddon, H., Stefanescu, V., & Lin, L. (2024, August 16). *What’s Wrong With Starbucks?* The Wall Street Journal.

WHAT'S WRONG WITH STARBUCKS? PRICES UP, WAIT TIMES LONG, AND A NEW CEO FACES MOUNTING CHALLENGES Starbucks is facing a series of significant challenges, from rising prices and longer wait times to growing competition, especially in China. Customers are feeling the pinch as prices for their favorite drinks continue to rise, leading to a drop in U.S. orders. The shift toward app-based ordering has transformed the in-store experience, often creating chaos and longer wait times. This has led some customers to seek alternatives, citing Starbucks as a luxury they can no longer afford. The new CEO, Brian Niccol, known for his success at Chipotle, has been brought in to address these issues. However, many challenges, such as the economic environment and increased competition, are beyond his control. Additionally, Starbucks faces difficulties in China, where local competitors like Luckin Coffee are rapidly gaining market share with lower prices and faster service. Starbucks' reputation has also been a double-edged sword, drawing both loyalty and criticism. The company's cultural involvement, from offering employee benefits to engaging in social issues, has made it a frequent target in the culture wars. As Starbucks adapts to these pressures, its strategies include promotions to improve value perception, investments in store redesigns to handle app orders, and exploring strategic partnerships in China to regain its footing in the market. REFERENCE: Haddon, H., Stefanescu, V., & Lin, L. (2024, August 16). *What’s Wrong With Starbucks?* The Wall Street Journal.

WHAT'S WRONG WITH STARBUCKS? PRICES UP, WAIT TIMES LONG, AND A NEW CEO FACES MOUNTING CHALLENGES Starbucks is facing a series of significant challenges, from rising prices and longer wait times to growing competition, especially in China. Customers are feeling the pinch as prices for their favorite drinks continue to rise, leading to a drop in U.S. orders. The shift toward app-based ordering has transformed the in-store experience, often creating chaos and longer wait times. This has led some customers to seek alternatives, citing Starbucks as a luxury they can no longer afford. The new CEO, Brian Niccol, known for his success at Chipotle, has been brought in to address these issues. However, many challenges, such as the economic environment and increased competition, are beyond his control. Additionally, Starbucks faces difficulties in China, where local competitors like Luckin Coffee are rapidly gaining market share with lower prices and faster service. Starbucks' reputation has also been a double-edged sword, drawing both loyalty and criticism. The company's cultural involvement, from offering employee benefits to engaging in social issues, has made it a frequent target in the culture wars. As Starbucks adapts to these pressures, its strategies include promotions to improve value perception, investments in store redesigns to handle app orders, and exploring strategic partnerships in China to regain its footing in the market. REFERENCE: Haddon, H., Stefanescu, V., & Lin, L. (2024, August 16). *What’s Wrong With Starbucks?* The Wall Street Journal.

Can Starbucks Rekindle Its Customer Experience Roots? You may think it’s crazy to talk about a positive and on-point customer experience in regard to a corporate coffee giant like Starbucks, but I remember a time in the late 90s when a sit-down visit to Starbucks in my hometown was a true “third place” experience. Deep conversations with friendly regulars that turned into lifelong friendships, acoustic music nights with awesome local musicians, and friendly baristas that knew my name and went out of their way to make me feel valued. This all happened in a comfortable and inviting space that encouraged me to get comfortable and enjoy the experience. Even with the relatively high cost for Starbucks coffee at that time, I was more than happy to pay extra for the experience. This was when my understanding of the experience economy first took root and became a lifelong fascination, leading me to further learn and explore the power of experience in business. If you’re a bit younger than me, you probably didn’t even know that many Starbucks locations were ever inviting and unique to the community in which they existed. This article perfectly captures the issue and echoes the advice I have given to café owners on multiple continents. Starbucks has strayed from its core value of offering a welcoming "third place" experience. This trend isn't limited to giants like Starbucks. I’m seeing smaller cafes and businesses fall into the same trap, prioritizing efficiency over the very experience that keeps customers coming back time and time again. Starbucks' turnaround hinges on strong leadership with a passion for exceptional experiences, not just efficiency. Do you think they can recapture their old school experience magic? Are they now too big to roll back to the experiential “third place” they once were? #CEM #CustomerExperience #Starbucks #Retail #ExperienceEconomy

🌟 Unveiling Starbucks: A Masterclass in Business Moat Construction; FCP review🌟 In the dynamic world of coffee, one brand shines brightly as a beacon of success: Starbucks. Beyond serving coffee, Starbucks has crafted an empire built on a robust business model fortified by a formidable moat. Let's explore the intricacies of Starbucks' business model and the elements that contribute to its unwavering dominance. 1. Brand Power and Customer Loyalty Starbucks isn't just a coffee shop; it's a lifestyle. With its iconic green siren logo and premium brand positioning, Starbucks has cultivated an unparalleled level of customer loyalty. Starbucks aficionados aren't just consumers; they're devoted advocates who eagerly await the next seasonal release or collectible mug. 2. Global Footprint and Market Penetration. With over 30,000 stores spanning 80 countries, Starbucks boasts an extensive global presence. This widespread reach not only enhances brand visibility but also offers unmatched convenience to customers, solidifying Starbucks' position as an industry leader. 3. Product Innovation and Differentiation. Starbucks continuously pushes the boundaries of innovation, introducing new beverage concoctions and seasonal flavors that keep customers coming back for more. From the classic Pumpkin Spice Latte to the trendy Nitro Cold Brew, Starbucks excels at creating buzzworthy offerings that captivate consumers' taste buds. 4. Digital Dominance and Customer Engagement. Starbucks has embraced technology to revolutionize the customer experience. The Starbucks mobile app and rewards program have become indispensable for loyal customers, seamlessly integrating into their daily routines and enhancing convenience. Moreover, Starbucks leverages data analytics to personalize marketing efforts and deepen customer engagement. 5. Operational Excellence and Supply Chain Efficiency. Behind the scenes, Starbucks operates with precision and efficiency, ensuring that every cup of coffee served meets its exacting standards. By streamlining operations and optimizing resources, Starbucks maintains a competitive edge in an industry prone to fluctuations. In conclusion, Starbucks' business model is a masterclass in moat construction, fortified by pillars of brand power, global reach, product innovation, digital dominance, and operational excellence. As the coffee industry evolves, Starbucks stands poised to weather any storm, its moat standing tall against competitors' advances. #Starbucks #BusinessMoat #BrandPower #CustomerLoyalty #Innovation #DigitalTransformation #OperationalExcellence

News Flash: New CEO Starbucks. Can a CEO influence or bring about a significant change in business performance? What do you think? >The CEO can lead, inspire and certainly work with the Board to gain approval for new initiatives. >Think back to a time where SBX added food choices, then depending on location and securing licenses wine and beer to extend daypart attraction. I think back to the SBX environment where music was featured, and the cool vibe was present at the corner coffee shop. The chain is part of the community or central to the clientele adjacent to office space, airport, etc. >On a personal note, SBX is never going to get the bulk of my business because I prefer Peet's Coffee! Likewise, I'm not addicted to their sugar laden drinks which still to this day they feature in my "personal" email. I've NEVER purchased anything other than a dark roast venti no room or a Venti Hazelnut Latte (always hot). Sugary drinks is where their innovation has been applied and the craving for more sugar yields both frequency to boost energy and provide a nice break from your desk. So what can the new CEO consider...here are some free ideas from Ascendant Loyalty Marketing: a.) Convert underperforming locations to new concepts matched to the demographics of that community b.) Improve the overall value from the rewards program and grow membership c.) Adjust the roast so your coffee doesn't always taste burnt d.) Add a new/fresh food partner to stores that have the square footage to drive daypart attraction e. And lastly, please tell me why they don't they have desserts - movie or date night stop at SBX! Lots of opportunity...but Brian Niccol will not be the one developing it. Note, on a global basis, SBX has a heavy reliance on affiliate partners who operate the stores - will they adapt these initiatives based on cultural differences? RetailWire Starbucks #loyaltyinnovation https://lnkd.in/gzYUaGCg

🌟 Unveiling Starbucks: A Masterclass in Business Moat Construction 🌟FCP Review In the dynamic world of coffee, one brand shines brightly as a beacon of success: Starbucks. Beyond serving coffee, Starbucks has crafted an empire built on a robust business model fortified by a formidable moat. Let's explore the intricacies of Starbucks' business model and the elements that contribute to its unwavering dominance. 1. Brand Power and Customer Loyalty Starbucks isn't just a coffee shop; it's a lifestyle. With its iconic green siren logo and premium brand positioning, Starbucks has cultivated an unparalleled level of customer loyalty. Starbucks aficionados aren't just consumers; they're devoted advocates who eagerly await the next seasonal release or collectible mug. 2. Global Footprint and Market Penetration With over 30,000 stores spanning 80 countries, Starbucks boasts an extensive global presence. This widespread reach not only enhances brand visibility but also offers unmatched convenience to customers, solidifying Starbucks' position as an industry leader. 3. Product Innovation and Differentiation. Starbucks continuously pushes the boundaries of innovation, introducing new beverage concoctions and seasonal flavors that keep customers coming back for more. From the classic Pumpkin Spice Latte to the trendy Nitro Cold Brew, Starbucks excels at creating buzzworthy offerings that captivate consumers' taste buds. 4. Digital Dominance and Customer Engagement. Starbucks has embraced technology to revolutionize the customer experience. The Starbucks mobile app and rewards program have become indispensable for loyal customers, seamlessly integrating into their daily routines and enhancing convenience. Moreover, Starbucks leverages data analytics to personalize marketing efforts and deepen customer engagement. 5. Operational Excellence and Supply Chain Efficiency. Behind the scenes, Starbucks operates with precision and efficiency, ensuring that every cup of coffee served meets its exacting standards. By streamlining operations and optimizing resources, Starbucks maintains a competitive edge in an industry prone to fluctuations. In conclusion, Starbucks' business model is a masterclass in moat construction, fortified by pillars of brand power, global reach, product innovation, digital dominance, and operational excellence. As the coffee industry evolves, Starbucks stands poised to weather any storm, its moat standing tall against competitors' advances. #Starbucks #BusinessMoat #BrandPower #CustomerLoyalty #Innovation #DigitalTransformation #OperationalExcellence

Great post from Neil Saunders about Starbucks recent struggles. I've been listening to Acquireds recent Starbucks podcast with Howard Schultz while working out. Listening to Mr. Schultz articulate why Starbucks was successful in the first couple decades and comparing to the experience today in 2024 is an eye-opener. He talks about the well-known concept of a third place of course (between home and work), but he talks extensively about how the sights, sounds and smells, the romance of the coffee making experience, and the intimacy created by lingering customers, created an environment that allowed them to delight all stakeholders, maximize the brand value, and realize margins previously unseen in the food service industry. Contrast that to today's experience. Cold, transactional, impersonal, with the majority of customers utilizing the app, and picking up through drive through, or a short stop at the take-away counter. In 2024 Starbucks has devalued the experiential aspect of their brand which created most of its value, and essentially become a commoditized product focused on throughput and cost. The experience itself was a huge part of the Starbucks brand value, as important if not more important than the coffee itself. Without the experience the brand has been diluted to fast-food, and the coffee and other products will continue to struggle to compete against competitors offering similar products and improved quality. If interested to learn more I highly recommend the Acquired Starbucks podcast. It's a great listen and Howard Shultz is an entertaining speaker.