Starbucks shuts down its online store--how is that not batshit insane?

In My Humble Opinion
1

https://customerservice.starbucks.com/app/answers/detail/a_id/5618

This happened at the beginning of October and was announced back in August. I managed to miss the news. I learned today that this was the case when I wanted to see what Reserve coffees were currently available (not that I was going to order online, but I just happened to think of it).

I’d link to some press articles, but the major news outlets are basically all parroting Starbucks own talking points on the matter: it was done to drive people to the physical stores, simplifying sales channels, blah.

Nor could I find any article with comments, so I guess we can discuss it here.

My opinion: what a travesty. To me, it’s an indirect admission by the company that its coffees are not all that special, including Reserve, which it would have us believe is premium. Why? Because Reserve is available only in limited quantities and at a limited number of locations. If it was just “so good,” then people would treasure the stuff and want to order it online right? Not just hope that they have a Starbucks in town that has it and it hasn’t sold out of that particular type. Effin’ ridiculous.

Further, there just aren’t that many varieties available of their regular stuff in any given retail location. Often, it’s pretty pathetic.

And to me it’s an admission that coffee itself isn’t really what Starbucks is all about. They started out in 1971 as a roaster in Seattle and only started offering coffee drinks in 1984. So shuttering the online store is in a sense dismissing that legacy, with the quality coffee as primary.

And most people probably don’t think of Starbucks in that way anyway. They go for a milkshake or one of the shitty pastries.

I’ll also point out another travesty that doesn’t make the future of Starbucks look all that great to me: buying and destroying Teavanna. Nice job. Classic case of a big company buying something viable and turning it into something dead. (See also: General Foods and Burger Chef.)

Not sure why the press has mostly sucked Starbucks’ penile sausage on this one, but I don’t think it bodes well for the future of the company. Sure, it’s going to be a giant for the foreseeable future, but perhaps this will later be seen as a negative turning point that few noticed at the time.

2

I… don’t get why you’re mad. You want to buy Starbucks coffee, which you don’t think is very good, and you want to buy it without setting foot in a Starbucks store? Only you weren’t planning on buying it?

You just want the option to be available, for you to buy Starbucks beans, in case you someday want to?

Gotcha.

If you want some nice fancy coffee, go to your local artisan roaster, talk to the staff, try their stuff.

If it really has to be Starbucks (why?) I’ve bought their beans at Costco before.

3

Maybe people weren’t purchasing enough from the online store, so they shut it down. I don’t know. I buy Starbucks ground coffee at my local grocery out in the sticks, so it’s rather widely available in general. I used to prefer Seattle’s best, but they stopped carrying it at the grocery, so Starbucks is my backup for coffee with character. (The grocery also stopped carrying Lavazza, which had a few varieties that I liked.)

4

I am not complaining, I am analyzing a business decision.

And please don’t use the word “artisan” seriously! It’s officially a BS marketing term! :wink:

5

According to another thread, it costs millions of dollars to maintain a web site. Maybe they weren’t making millions of dollars to pay for it?

6

…your analysis does not appear to be objective, and does appear to be disproportionately emotional. IMHO “you’re mad with the decision to close the online store” is an appropriate characterization of the opening post.

7

Maybe. But there’s also the marketing value of the website (see it online but buy it in a store–would apply to Reserve in particular) and the prestige value of having a nice website.

To me, it just looks bad for a major company like this to shut down its ecommerce. Aside from failing companies, has a major brand ever done such a thing? (I assume there has to be another example, but I can’t think of one.)

8

I do not believe that it cost millions of dollars to maintain a website. Aside from fancy Consulting fees, I’m not even sure cost $1000000 to build a complex website. But that could be argued. At any rate what with decentralized shipping points I am stunned that anyone would think it cost millions of dollars to maintain a website.

I suspect this is about the prophet to mass ratio. I am guessing that almost nobody buys those cute little coffee mugs online. Nobody purchases the baked goods or breakfast sandwiches online. Coffee beans are heavy. I am guessing they simply lost money on the cost of maintaining stock and shipping the

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9

Is that what you get when Muhammed celebrates Easter?

10

Also in terms of why they did it, the company said:

  1. That is some amazing corporate-speak. Buzzwordy.

  2. What about, you know, serving the customer? This isn’t about driving cattle into a pen. The online store was about offering people convenience and (to those who didn’t otherwise have it) access. Oh well, fuck that.

  3. RIP Opal.

I’m still amazed that the press gave this free pass. Worse, it’s more like a herp-derp-who-cares kind of pass. WTF?!

11

Actually, for buzzword corporate-speak, the message is pretty clear.

Maybe the ecommerce site is unprofitable. Maybe it’s too profitable, and when Starbucks looked at where the orders were coming from, they decided online sales were cannibalizing their retail sales. Maybe Starbucks is following the convenience store model – get you there for one thing and entice you to add on to your order.

As a non-coffee drinker I can’t comment on how good Starbucks actually is. But if it’s basically middle of the road, it sort of makes sense NOT to sell it as a standalone product, but instead focus on the “experience” of going to a retail store, exchanging pleasantries with the barista and subconsciously enjoying that you’re getting an uncommon coffee that you can’t simply order online.

12

As noted, you can buy Starbucks coffee at grocery stores. Ours also has an in-store Starbucks a couple aisles away.

And you can buy Starbucks online via Amazon and such.

Running your own online store is a waste for a lot of companies. Let others do it.

13

Clarity wasn’t the issue, stiffness and laughability were.

Then you would work to make it profitable, to work. I’ve read no speculation that the store was a boondoggle. This is 2017–ecommerce! You don’t just give up on that shit if you’re a major brand.

If online sales were so strong that they were negatively affecting retail (which I have a hard time believing), then you don’t just throw out a big chunk of business but look to channel it in other ways. You would look to get to know your customer better and try to upsell them with other online offers, give them incentives to visit the bricks and mortar stores, etc.

The thing is, if you are trying to sell yourself as a “premium destination,” you don’t chuck things that add to the premium image. Quitting ecommerce in 2017 is declasse. It’s just… weird.

Their Reserve coffees were being marketed as premium and not widely available, so ditching ecommerce for them makes no sense, even granted what you said above. I also think Starbucks would balk at being compared to a “convenience store.” They self-labeled as a “must-visit destination.”

BTW, the analysis you gave above was fine to lay out the possibilities for why they did what they did. I just don’t think any of them are justifiable. If I had to venture a guess at what really happened, it would be this: the online store represented a tiny fraction of their business and may have had dubious profitability (though I doubt as well a big loss), and they simply cut it in a short-sighted way, more or less oblivious to the optics of doing so in 2017. It does make me doubt the quality of management currently there.

14

I don’t think this is the philosophy of many major brands.

15

[Moderating]

While this could be argued to be about food, it looks like it’s really more about business practices, and so makes a poor fit for Cafe Society. I’ll move it over to IMHO.

16

I’ve never thought of having a on-line store as a “prestige” thing. And Starbucks coffee is widely available. I don’t know why they stopped selling it on-line, but I can’t think why anyone other than their web developer would care much.

I see several flavors of beans and some canned coffee drinks on Amazon, so you can still buy the coffee on-line.

Ah – the Motley Fool article says: Syrups and sauces, which customers could use to duplicate their favorite drinks at home will “no longer be available for retail purchase.”

So maybe that’s the point? They don’t want customers making the fancy drinks at home, for a lower profit margin? Anyway, making fancy coffee milkshakes is too much work, that’s what starbucks storefronts are for.

17

I guess no one wants to pay attention to the fact that they have a line of premium “Reserve” coffees with limited availability that they sold online.

18

It’s probably more accurate to say that not having an online store is damaging to prestige with respect to a great many types of brands.

Obviously, there are many different types of distribution models. Starbucks does not have franchise stores; they are all corporate-owned. So there was no “ripping off” franchised storefronts by selling online. Cannibalization could be a potential issue. But shutting down that online store and just saying buh-bye to that channel for customer engagement and whatnot? That’s not premium. That’s not prestige.

19

I didn’t realize that. I have never taken Starbuck seriously as a source of excellent coffee, though. Way back when, the Coffee Connection was a source of excellent coffee. Starbucks bought them out. They had excellent coffee until the stock ran out, and haven’t since.

20

We have a Starbucks card with $50 worth of credit on it. I live in the sticks, so going to a Starbucks store is a giant pain in the ass. But now that they don’t have an online store, that’s what I’ll have to do since that’s the only place I can use the card. I suppose I could just not bother, as the credit is a gift (so not my money), but I’m also not thrilled about just letting the company keep it. It also makes no sense to me why they would do this - there are, I am sure, plenty of people like me who rarely or never set foot in a store but are happy to buy online. I definitely will not be visiting again after I spend this credit.