Starbucks, Im ashamed of you. Letting Borders tear into your behind like that. I have been coming to Starbucks for 7 years now, paying $26 a month to use your wireless, dealing with hippie baristas that demand I call large drinks “Venti”s and blended drinks “Frappucinos”. (I dont care what you call it, just get it for me!).
Well, this relationship is over. Borders has free Wi-fi. And magazines. And space. And no hippies. I can study, get online, go get research material, and order drinks in English. Plus, they have happy hour specials, free cookies, etc, and in a Recession everybody knows that you have to cut prices or lose market share. You, Starbucks, are losing market share.
The business lesson in all this is that if you really knew your customers, you would have known that I only put up with Buckeys because I needed a place to work online away from the distractions of home. The only other people that go there are people who are conducting meetings and lonely hippies.
And with McDonalds getting into the coffee game, what reason does anybody have for going to Starbucks now?
I hate to say it Starbucks, but you saw it coming, insisted on maintaining the status quo, and now you may never see $40 a share again. Your quest for World Domination has come to an end.
What can you as a business or brand learn from Buckey’s failure?
Popularity: 26% [?]
I’ve learned that under no circumstances do you stand so stoically against change. One of three things had to have happened: either they completely overshot their importance and figured the power of their “StarCrack” would draw and keep customers and saw only the monetary gain of partnering with an internet service provider, saw the emergence of Borders (and some Barnes & Noble) offering of free wifi as non-important (even though as you said, many have coffee shops of their own with comparable tasting and priced drinks)or they’re just plain blind to the fact that “internet cafes” are generally based around there being internet that’s preferably free! There’s free wifi nearly everywhere now and that $8 cup of joe just isn’t the business. Classic case of the juggernaut tripping on the pebble on the edge of a cliff.
What I learned is at no point should your company be so large that you can’t make changes to your business model and content with the upstarts.
Thats the same conclusion I came to. Starbucks’ swagg turned into arrogance and now their cafes are empty. I think there are alot of other companies with BS customer service and overpriced plans that can learn from this.