Putting the ‘Bar’ in ‘Barista’: Pricey Lattes, Capuccinos, and Macchiatos…….With a Beer Chaser?

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With a serving concept originally generated about four years ago to build its night time business (USA Today), and then intensively beta tested, Starbucks has begun rolling out their new drink and munchies menu, serving beer, wine, and their version of bar food, ultimately at thousands of locations. The new wrinkle, called Starbucks Evenings, has been thoroughly designed and thusfar cascaded into key markets; and alcoholic beverages will be served only in locations where demand is expected to be – – – well, high.

Starbucks has reached 40, a mature middle age; and the chain has been actively seeking to rebuild and evolve its brand, and make their locations more a part of the local neighborhood. The chain has tried “line extensions” in the past (Starbucks ice cream was a total disaster), but Starbucks Evenings is serious and strategic. The updated stores will have new, more muted colors in their interior design that are definitely a departure from what customers have come to expect – – at a refurbishment cost that begins at $25,000 and can reach six figures (customers wanted amenities such as outdoor decks, indoor-outdoor fireplaces, sustainable furniture, and an expanded menu). From many perspectives, this is a huge gamble for the worldwide chain.

Everyone understands the potential negatives: a compromising of Starbucks’ high-end coffee house image, and the business downside this can bring. Baristas need to be trained in how to sell alcoholic beverages, and may also need to be trained in how to deal with “overserved” customers. Finally, the company has to address how to accommodate the minors who frequent their locations in large numbers. After all, drinking coffee and tea is legal irrespective of age; and there may be challenges in setting up spaces for underage customers, for those adults who don’t want to be around alcohol, and for those customers who are only in Starbucks for beer and wine. Starbucks is convinced that won’t happen, in part because other chains – Chipotle Mexican Grill and Red Robin Gourmet Burgers (though a family restaurant, it’s offering dessert/alcohol combinations such as a Mango Moscato Wine Shake) – have been doing this for some time.

On the (calculated) plus side, the company’s approach represents an opportunity to attract customers who would like to have an alcoholic beverage in a safe, calm and pleasant atmosphere and who will pay a premium for the privilege, just as they have for Starbucks’ daytime beverages. Some of these may be new customers, who could return during the day to enjoy Starbucks’ traditional food and drink fare. Also, the evening food and alcohol menu will be served at locations near public transportation, generating high levels of foot traffic.

At the end of the day (pardon the pun), it’s all about the customer experience. Starbucks believes that selling alcoholic beverages is a natural progression for the company. As stated by their spokespeople, Starbucks is all about occasions for customers to gather, relax, and interact with one another. And, this is particularly true in the evenings, after work and after dinner, which is usually the busiest time for coffee shops and bars.

Most observers and analysts think Starbucks will succeed. As one frequent and loyal daytime patron, who has now included evenings in his Starbucks visits, noted: “It’s not just the wine, it’s the unwind. The atmosphere here is all part of the experience.”. A tip of the hat, a tip of the cup, and a tip of the glass to Starbucks for taking this marketing initiative. Cheers!!

Michael Lowenstein, PhD CMC
Michael Lowenstein, PhD CMC, specializes in customer and employee experience research/strategy consulting, and brand, customer, and employee commitment and advocacy behavior research, consulting, and training. He has authored seven stakeholder-centric strategy books and 400+ articles, white papers and blogs. In 2018, he was named to CustomerThink's Hall of Fame.

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