Thursday, August 07, 2008

What can we learn from Starbucks' withdrawal from Australia???


I am open about my fondness for Starbucks... just check my Flickr if you need some proof.

Personally, I prefer Beanscene or wee indies like the one in the Merchant City that is sadly no more... why? they have soul. I like Starbucks because it fits with my lifestyle... whether I am grabbing some peace & quiet at lunch time... catching up with friends or making new friends... or spending some quality time with Olly. I love the fact that there is a sweet lassie barista in Borders who remembers me... but, most of all, I like it because it is convenient.

I've been mulling over the recent announcement that Starbucks has pretty much withdrawn from Australia... as the BBC reports ::
Eight years after it began selling its espressos and frappucinos in Australia, the US giant has succumbed to powerful financial and cultural pressures and has closed 61 of its 85 shops across the country.
I particularly like this quote...
"The coffee experience is two things," says John Roberts from the University of New South Wales.

"Firstly, it's the product and the taste and secondly the place and the service.

"It's much easier for the local store to differentiate itself as being local whereas Starbucks had this slightly schizophrenic positioning where it wanted to be the global, local store,” he said.
...and this one from Barry Urquhart, a retail consultant based in the Western Australian state capital Perth...
"The American, Seattle-based coffee of Starbucks was never going to resonate and penetrate Australia's very big coffee drinking community.

"We have the most cosmopolitan society in the world."

With more than 235 ethnicities speaking more than 270 languages and dialects, companies wanting to get ahead in Australia should be aware that they are not dealing with one monolithic block, Mr Urquhart explains.

"You have to recognise that and service differing needs.”
What are the learnings that we can take from this?

Firstly, Influx Insights suggests that homogeneity is dead...
Perhaps brands need both consistency and inconsistency; they need to flex and play with both elements. It's clear that consumers today probably need a mix of both. Certainly parts of brands need standardized elements, but they also need to surprise and delight their customers. They need to get ahead of the curve, rather than behind it.
Consistency is the key factor with global chains... fries in McDonalds are the same in Motherwell, Scotland; as they are in Venice, Italy; or downtown Philadelphia. Thing is... its an "in and out" experience... I go in, get what I want, consume it, get out.

The only McDonalds that sticks in my mind as being a special place is the one on Sauchiehall Street, Glasgow; because of the awesome interiors on the first floor. This is inconsistent with my experience of the golden arches and as such sticks out.

Is Homogeneity dead... or at least is it dying..? It depends. An inconsistent experience only works in the positive. I enjoy something new... something different... something unusual... but the new... the different... the unusual... only works when there is something to compare it with... a foundation of consistency... something that's the same regardless of fashion / fad etc.

A negative inconsistent experience is a bad thing... the coffee isn't right... the space is dirty and unkempt... 10,000Hz Legend isn't Moon Safari... etc...

Consistency gives positive inconsistency a platform from which to work... but negative inconsistency can damage all the hard work undertaken to build a consistent base.

Secondly, the smaller niche players can win over the big players through their "local" customer service. Knowing the customer is key... but knowing the customer personally is vitally important. This was a key differentiator with the wee indie in the Merchant Square - it was my local coffeeshop and they recognised me. That is why local will always win with me.

There is space within a standardised approach for local knowledge - consider the sweet wee barista in Borders who recognises me and knows my orders (either an Earl Grey tea or a Rwandan filter). Hers is my local Starbucks and I like the fact she remembers me... but this is not commonplace in Starbucks... she is an exception... a positive inconsistency. This knowledge comes with time... and time is something Starbucks and other popular chains do not have the luxury of. I don't mind waiting a wee bit extra if I know I will get excellent personal service when I am eventually served.

This local knowledge treats people as individuals with individual needs. Add to it a degree of flexibility and reactiveness to the individuals personal tastes/wants and you are on to a winner. Homecooking, for example, can and does change... whereas, apart from the "muffin of the moment", the food in Starbucks is pretty consistent. The ability of the bigger providers to react to changing customer wants/needs is slower than smaller, niche players with their ear to the ground. Why doesn't Starbucks offer rooibos tea in the UK, for example, even though there is a real growing appreciation of redbush leaves?

The next nail in the coffin of Homogeneity is passion. I believe there is more passion when the owners themsleves are part of the scene that their space/product is part of. It easier to create belonging if you yourself belong.

At the end of the day it comes down to passion for the product... genuine interest in the local customers... a consistent approach to service and a positive, suprising degree of inconsistency to succeed.

Now... how can these learnings be applied to the church? Hmm... that's for another post.


duncanmcf said...

Interestingly though that Mc D's Australia ( appears to be alive and well, thus diminishing any argument from the Aussies that they are less homogenous than us. After all, this is the country that has a distinct lack of variety in its beers. And produced Neighbours and Home & Away, hardly variety :-)

I suspect there were other factors.

Angus Mathie said...

Good observations, Thomas, there's nothing like being treated not just as another customer but also as another unique human being. A smile/ "hello" or other brief part to the experience may be all that is required to make a difference. The product may be the same throughout the world but the human interaction can be "personalised". This is an invaluable part of the welcome to a church, for example, and the indication of being willing to spend time really listening to individuals.
It is interesting that the founder of Beanscene would entirely agree with you and he is trying to buy it back from Administration.

Anonymous said...

I really hope that this is part of a move back to supporting local businesses.

I do get a bit fed up with all the generic brands in every town you go to. It was nice to go to Fort William and actually see some different shop names!

weareallghosts said...

Thanks for your comments, chaps!

@Duncan - I agree that there are other factors involved. Starbucks has lost out to local chains, not necessarily truly local indies. I think it has more to do with the "soul" factor... the sense of community and belonging that local coffeeshops can offer.

@dad - personalisation through human interaction is truly a differentiating action - both positive and negative inconsistency if done right or wrong respectively. As for the church... it goes before the welcome to church (although that is essential)... its to do with the relationships we build missionally.

@Rob - local is best... there is a fab wee indie in Fort William that I only discovered on the last day of our visit last year... it even hosted a gig by "the bird and the bee" which I thought was very progressive and a sweet demonstration of positive inconsistency that the chains could never dream of. Sometimes, though, you have to make do with what you have. I am fond of Starbucks but prefer Beanscene... and would prefer a Beanscene as my local.


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