If they are trying to drive traffic to physical locations, why do they sell bags of coffee in every grocery store?
My guess is major retailers were getting pissed
at Starbucks, trying to be a wholesaler and retailer at the same time can be a messy game.
Though, they probably did the standard thing of selling to grocery stores, etc., at a wholesales price point such that they were not being undercut by the online store.
I’m sure the big guys were able to negotiate good prices, but at the same time they are competing against THE manufacturer, wholesaler, retailer, etc.
Bingo.
What’s the point of having an online store and whatever expense comes with that, if you are already selling it in every Walmart, Kroger and other grocery store in the country, and also on Amazon and Walmart’s online stores? Not to mention it being available at every physical Starbucks location in the country?
It’s like Procter and Gamble selling Tide through a Tide Online Store. What’s the point- the stuff is nearly ubiquitous.
I guess I must repeat myself again: the Reserve line of premium coffees–plus the other points I made.
Again, Starbucks would undoubtedly balk at being considered the same thing as a daily commonplace like Tide. “We’re PREMIUM, dammit!” But deleting the online store actually provides a foundation for the commodification you describe: “Hey, you can get our shit anywhere, so why bother with ecommerce?”
That’s precisely why, if for no other reason, it made sense to keep the online store: it helped keep up the pretense that Starbucks is a premium product and not a commodity.
Actually, according to its last annual report, Starbucks has 8,761 company-owned and 6,132 “licensed” (franchise) stores in the North America. Worldwide, the percentage of franchisees is even higher.
The company doesn’t break out online sales. They’re lumped in the category of “consumer package goods” sold through grocery stores and other retailers. The entire category is only 8% of revenues, and I’d imagine the online segment is a relatively small portion of that.
But more importantly, reading through the annual report, it’s clear that Starbucks sees itself as a retailer/restaurant, not a coffee supplier. Several times it refers to the Starbucks Experience (that’s literally in italics!) And if you read the CEO’s comments to analysts after the last (disappointing) quarterly earnings report, it’s clear that the company’s next big thing is trying to increase their lunch business.
If you sell your product in almost 15,000 North American locations and through grocery stores, and on Amazon, why bother with an e-store, especially if a poorly designed or glitchy site could damage your Starbucks Experience?
Tide is a premium laundry detergent. It’s arguably the most sought after brand in America.
Yeah, I was wrong, but I think those (at least in the US) are the ones that are in Kroger grocery stores, airport kiosks, and whatnot. I don’t think the standalone Starbucks are franchises, but of course I could be wrong.
Probably. I doubt they were making much money off of it. Point being, it’s a “bad look” when you’re a zillion-dollar corp and you ditch your ecommerce. Even if it was in the red (which I doubt, at least not much at worst), it’s an online ad for the brick and mortar as well.
I agree with the analysis here:
It increasingly appears that today’s Starbucks literally isn’t interested, or able, to do anything other than build, and operate, more Starbucks stores. And Starbucks is clearly doubling down on its plans to be Starbucks store-centric.
Starbucks is facing the problem that any mega-sloppy-big company faces: how the fuck do we grow and justify our existence under “capitalism,” in which growth is everything? Once companies max out their shit, the game just isn’t fun any more. One you win, you lose, in effect. Starbucks has stumbled with a bunch of stuff in recent years. They tried selling beer and wine after a certain time in the evening–flop. I gather that their food sales are stagnant. Several years ago, they were like, “We’re redoing all our baked goods!” but today they are kinda the same old thing, and I don’t see people clamoring for their food when I go in there. Sure, it sells. But the whole food operation seems lost in 2006 or so (Starbucks as a whole does too, however).
Well, it wasn’t; it was (insofar as I could see) a first-class website.
I’m an MBA who is extremely cynical about corporate culture. A lot of what CEOs do is akin to the man who loses his keys but searches beneath the lamppost first for them, since if they are there he can find them easily. Companies love to blather about stuff like the “Starbucks experience,” since that’s, so to speak, software that anyone can make believe about. Hardware (if you will indulge my analogy), such as radically new products that actually make a difference to customers, are much harder to pull off.
To me, Starbucks has coffee that tastes fine and nice enough decor and bathrooms that among the best to use when one is on the road. There is no special “experience” beyond that. Anything they offer that’s experiential has been fully commoditized at this point. And I’m sure their execs on some level know this. They don’t really have any vision about how to move forward. Ditching ecommerce and shuttering Teavanna show a really depressing lack of vision, IMHO.
Before reading this thread, it would never have occurred to me that Starbucks might have an online store, any more than any bar or restaurant would. Ordering coffee drinks online? That’s the part that strikes me as batshit insane.
Drinks can still be ordered with the Starbucks app, so that hasn’t really changed.
…considering that you are the only person that I can find online that is remotely upset by this, I very much doubt its that much of a “bad look” for Starbucks at all.
SEattle’s Best is part of starbucks. See hereL
In the hallowed halls of the Microsoft HQ, free coffee machines for the employees are everywhere featuring a pushbutton choice of starbucks or seattle’s best 6 years there and I couldn’t tell a difference. YMMV
OP, is it your contention that Starbucks is in some kind of secret financial trouble? If so, how serious! If not, why do you find it so hard to believe that they may have perfectly rational reasons for their decision?
Okay, I don’t care who you are, this is fucking funny.
I think this is it, in a nut. Starbucks doesn’t really sell coffee anymore (well, maybe to older people), they sell coffee-based drinks. It’s an important distinction, and it is my belief that they want to drive business to their (arguably more profitable) brick and mortar places to get that ever so special, one-of-a-kind coffee based beverage that you cannot buy (or replicate) anywhere else. The irony of course is that many, many Starbucks “stores” are fronts in a Kroger, etc where you can just as easily still buy their grounds, beans and K-Cups (by the way, the flavors on these are LEGION) rather than wait in that stupid line that always takes forever to get a mocha/frappa/caramel/salted/macchiato/vente/whatever pretentious language they created…drink.
Well, I find know anyone irl who cares, either. But Aechines, you are not alone in being unhappy with the changes they are making. My son is sad they are closing teavana.
Why is this a bad look? As an investor or analyst, what you want to see is rising margins. It sounds like Starbucks sat down, realized that their online shoppers just want a bag of French Roast twice a month, and said “hey Costco, you’re good at this, let’s make a deal”. And that’s why there’s a dedicated Costco e-commerce page offering Starbucks products that people are most likely to buy.
They may have started life as a roaster, but they’re well beyond that now. They’re a coffee shop. I hear the margins on sugar milk are very fat. People get twitchy if there’s not a Starbucks in a 1-mile radius. They have a mobile app that offers incentives to visit the store during slow times.
This doesn’t make sense to me. You can have online ads that aren’t attached to a bag of coffee beans. Ads are cheaper that way.
Having said that, ironically, I was just about to go pull up the online store to see where I could buy their ‘Christmas Blend’ which I found unexpectedly good this year. It’s already sold out of the local stores. Hello artificial scarcity and high prices!
Not to worry, you don’t even have to belong to Costco.
Starbucks has an Amazon storefront. (e-i-e-i-o)
And in that storefront they have Holiday Blend. (e-i-e-i-o)
I was never convinced that the person that filled the machines ever made any distinction between what coffee they were dumping into which slot.
My wife tried ordering coffee from their online store but it was cold by the time it arrived.
Thanks kind stranger!