Funny that they didn’t even mention this in their PR… “Hey, you can still buy us online at Amazon!” They really don’t seem even to be thinking about how any of this affects actual customers.
If no one is upset by it, that’s an even worse marketing situation: no one caring about what you do means, well, no one cares.
I think this is a problem for Starbucks. As I’ve said above, both their products and their experience have become commoditized. Not special. If they don’t have a fanbase, however small, that’s up in arms about shutting down the ecommerce site, then why would they have a fanbase that is passionate about their brick-and-mortar stores? You can say that they are two different things, but they are almost certainly correlated, and a low engagement figure for one is suggestive of a low engagement figure for the other.
…this is one of the most ridiculous things I’ve ever heard.
The thread is titled “Starbucks shuts down its online store–how is that not batshit insane?” Of course you think it is a problem for Starbucks. That doesn’t mean its actually a problem for Starbucks.
Because they are two different things?
I just did!
No one isn’t suggestive of the other. Because they are two different things.
I used to shop “on-line”. Now I just shop on Amazon. It’s so very often the cheapest that occasionally paying more is worth the convenience of not having multiple accounts.
I get the impression I’m pretty normal.
I’m with the OP. This is a PR catastrophe of car floor mat proportions!
If people stop caring about one product line, the smart thing to do is not plow excessive money into it.
Because of the increasingly diverging Venn diagram of people who are passionate about coffee-as-coffee, and people who are passionate about glogging down a pint of fancy sugar milk while they listen to NPR on their morning commute.
I mean, sure, you can argue that Starbucks should want to appeal to true coffee afficionados. But you can also argue that there’s more profit in giving your customers more of what they seem to be demanding. shrug
Admittedly, I live a stone’s throw from the first Starbucks, one of the Roasteries, and headquarters - so I’m in a slightly different position than many people, but when I wanted those coffees, I would just go to the store and buy them.
Also, based on the lines and crowds of people with selfie sticks - there are still people who are very passionate about the Starbucks Experience.
Hmm, could it be for the multiple reasons I’ve already stated?
That’s one metric. There are many others. Increasing same-store sales is a big one, and the article I cited said this metric is stagnant for Starbucks. They have increased sales by charging higher prices (not necessarily more profit; costs may be going up as well) and opening new stores. But the article asks, Does the US, or international markets, really need more, new Starbucks stores?
For a long, long time now, Starbucks has been whoring itself any which way but loose. I saw Starbucks in Costco what seems now like 10 years ago. They’ve been available in grocery stores for a long time too. Therefore, the existence of those channels, I would suggest, can’t be big reason to ditch ecommerce.
I think it’s funny that so many people in this thread are making statements like this. Oh hey, it’s no biggie. Really?
Brands require pretense. I’ll give a very analogous example. Until the 90s, Godiva chocolate was very exclusive and very expensive. I remember my dad bringing home a box in the 70s (that I believe had been made in Europe), and it was a big deal. We weren’t allowed to gobble it down. Today, Godiva is a whore brand like no other, selling for cheap in CVS and wherever else. But they still have the pretense of being “fine chocolate,” and the pseudo upscale outlets in malls where they have the dipped strawberries and whatnot help support that. I’m going to go out on a limb and guess that those outlets generate a tiny fraction of their revenue compared to “all the channels,” but I think it would be similarly unwise for Godiva to ditch them. Doing so would burst the pretense bubble.
To me, Starbucks ditching ecommerce is like that. Hey, guys, we’re not serious about coffee. Hawhawhaw! Just gotta get the sheeple coming in more for hazelnut lattes and breakfast sandwiches! People in this thread are not differentiating between what perhaps Starbucks’ thinking actually is and what what message is safe for the company to project.
Non sequitur. Their online store served as an ad but was not an ad in the same sense as advertising in other media. As for the relative cost of each, that would require some data and some analysis.
You mean you had just happened to be looking for the now defunct online store before you saw this thread?
Wow. Cool. I hope I make a lifelong impression.
I meant, in the context of my reply, that if people don’t care about the online store going away, as the commenter suggested, then that lack of caring would not be a good thing for Starbucks.
Sometimes companies do have to cut bait and make a decision that disappoints a significant percentage of their customers. Such disappointment is a downside of the decision, but no one caring about what would seem to be a major decision is an even worse situation.
Clearly, those people are jazzed about being in the original Starbucks location in Seattle or whatever is closest to it today. I would agree that means they care about Starbucks, but it doesn’t follow that they care about what the suits have in mind with their corporatespeak phrase “the Starbucks Experience.”
Yeah, really, it’s no biggie (since you asked).
Brands are just a signifier for products and services. There are premium brands and aspirational products, but not every product is like that. It doesn’t automatically translate to revenue if you can’t get people to pay for the premium brand.
And as I see it, that’s what’s happening with Starbucks. The coffee connoisseurs I know would never buy coffee online, let alone Starbucks (who is mocked as being inauthentic, overroasted, and overrated). They’re going to some local indie place where they think they’re making an authentic community connection (real or imagined) that they don’t get from Starbucks. It seems to me like Starbucks is just recognizing and adjusting for this.
Not exactly. I was thinking of buying a blend that Costco had run out of, and I should look online for it. I assumed Starbucks would have a store, but turns out the product is available on Amazon like everything else in the world.
And why should that be a problem? It’s not like an online e-commerce presence gives me the smell of a roast, the pleasure of running my hand up a woodgrain handrail, a knowing wink by the barista as I choose the very best coffee on offer. Anybody who feels like they get that kind of exclusivity out of a website should have their head examined.
For the life of me I can’t understand why somebody would get so worked up about a company recognizing where its growth lies and focusing on it. I mean, if you like Starbucks and you’re sad to see its brand diluted, I get it. I’ve grieved over lost and and diluted brands. But it would never occur to me to accuse a company of corporate malpractice just because their business judgment doesn’t suit my personal preferences.
I can understand the framing, “This is normally the kind of thing that is a biggie, but in this case for XYZ reasons, it’s not.” I don’t get the blasé dismissals I’ve encountered in this thread, as though to even mention the fact that this has happened is itself stupid. It hasn’t led to a very interesting discussion. But now you’ve said some substantive things, which I appreciate.
No one wants to acknowledge the Starbucks Reserve brand I’ve now mentioned like a dozen times. It’s premium brand. It still has a website. Starbucks doesn’t have it on its Amazon storefront. Did you know that Amazon has certain stores where they stock Reserve and have the Clover machine, which is supposed to provide this really awesome coffee experience? It wouldn’t shock me at all if they ditched that whole thing too in the near future, but for now there is explicit marketing in the premium zone. I don’t see how one say that ditching ecommerce doesn’t damage the Reserve brand in some way.
OK, hit pause for a second. Do you really think that the marketing suits at Starbucks would be OK with what you just wrote? That matches the internal narrative at Starbucks? I can almost guarantee you that they do not.
In terms of coffee, something like Dunkin’ Donuts is explicitly going for an “everyday joe,” reasonably priced image and product. Starbucks does not want to be lumped in with everyone else. After all, it was roasting “quality” coffee back in 1971, decades before most people knew what “real” coffee even tasted like. Of course, today, that’s a dated narrative and I agree with you that Starbucks is regularly dismissed by coffee aficionados as something not even worth thinking about. But companies hold onto those narratives for a long time, and the suits really have to pretend that they believe them. Kinda how Sam Adams still sees and portrays itself as better beer, even though its cred died a long time ago.
I don’t think that makes any sense at all. I am a tea fan and I buy it online, and you pretty much have to if you want to explore a wide selection. I can get plenty of info from websites and use what’s in my head to make decisions. E.g., if I’m told that a keemum is especially rich, I can imagine what that means. Similarly, if Starbucks sells its Jamaica blue mountain online (which it did), it can riff on what coffee fans already know to describe it and make sales. And though I’ve never bought coffee online, you seem to be saying the idea is absurd, you are dismissing it. I find that quite odd a stance.
I am not “worked up”; I am interested in having an intellectual discussion about this issue.
I am truly neither a fan nor a hater. I think it’s a company that’s in an interesting and quite dangerous position, however, and that’s what makes it worth talking about. It’s reached that stage in its growth where shareholders are crying more more more, but more is going to be hard to deliver.
I’ve never bought anything on their website, so it doesn’t affect me at all. I’m an MBA, one does lots of case studies in b-school, and I think this is a really interesting case study in progress.
You’re not the only MBA on this board, & I need to disagree with you. They want to drive more traffic into the store where they’ll buy a bag of coffee & a $4 or $6 drink, & maybe even lunch, too. Their coffees are also available on other websites as well as a number of non-Starsucks retail locations, namely supermarkets.
romanperson is not their target market, & probably better for their bottom line if that gift card isn’t used.
IMHO, this is the failure in your argument. Any small business can set up an online store for very little cost; I hardly think having your own online store means your a premium product. In fact, I think the opposite is true; having a physical presence, either thru distribution in major retail channels (supermarkets) or many of your own stores indicates a premium product. Watch SharkTank some time (yeah, I know) but they aren’t interested in doing deals with the guy who only sold $1000 worth of goods last quarter.
Well tell them to come to this thread, as I’d like to hear more intelligent comments, whether agreeing or disagreeing.
Yup, this has already been said a bunch of times. I think the argument about driving traffic falls on the horns of a dilemma: if the website was truly so effective as to cannibalize traffic, it would be insane (batshit insane, even) to just drag it to the trash can icon instead of trying to channel that energy, enthusiasm, and sales in some other way. I don’t think there is much evidence (Starbucks own communications, etc.) to point to this horn of the dilemma. That leaves the other: If the website was so small as not to affect foot traffic, then why not just leave it up? The only reason would be if it is massively in the red; again, not a very realistic scenario. FWIW, the articles by the major media showed a shocking lack of interest in pondering this scenario and simply parroted Starbucks talking points for the most part.
What is their target market? That’s something I don’t see Starbucks defining very well at all. And I think the notion of companies making money from people not using gift cards is absurd. You want people to come in, engage, have that vaunted “experience,” and become a repeat buyer or advocate. You do not just hope that people lose a gift card so you can make an extra $25.00.
Everything you’re saying here is wrong. The presence of a physical location is irrelevant to being premium or not. By your logic, Burger King is premium food and Dollar General is premium retail. I would say, however, that having big chain can certainly project an image of power and legitimacy. Everyone knows that McDonald’s has shitton of locations and is a corporate giant. No one thinks of it as premium, however.
Further, while it’s absolutely correct that having a website or online store does not in any way demonstrate that a business is premium, not having a website or online store could definitely send a negative message. In fact, that’s really what I’ve been saying this whole time: it’s not so much that Starbucks is going to lose important sales by nixing the website; rather, it seems weird and sends the wrong message about the company. It’s like doing networking with our without business cards. If you have them, that’s no big deal, everyone has them; but if you don’t have them, you look like an idiot.
It would be different had Starbucks never had an online store to begin with and had always said in the FAQ, “We’ve chosen to market our product through our retail locations and through select partners.”
Taking something away is different than never having had something in the first place. Companies do this all the time, and typically they get called out on it. Why is Google Wave going away? Why is Google Glass? Oh, those were flops. What does that mean for the company? There is endless speculation and analysis on that kind of thing.
Starbucks’ online store wasn’t a tiny hole in the wall in cyberspace. It was big and clearly had a lot of care and work put into it. I received regular emails about products and special offers. The fact that this has gone away and the press has basically either shrugged or not noticed it at all is strange.
If so, it wasn’t a very powerful ad. Until opening this thread, I had no idea Starbucks had an on-line store. And while I’m not a huge fan of starbucks* I’ve bought plenty of their product.
This.
Okay, I’m not actually a coffee snob, but father used to be, my BIL is, and my nephew worked for a super-high-end coffee place and opened his own little high-end coffee shop in his school. So I’m familiar with what coffee snobs care about. Aeschines, you say you buy tea on line – and I do, too, and many tea snobs buy tea on line. No coffee snob does, unless they buy it raw and roast the beans themselves. Properly stored, tea keeps for more than a year without discernible loss of quality. Roasted coffee declines in quality in days. Even I can tell the difference a couple of weeks makes. So coffee snobs buy their coffee from a place that roasts it – from a place that JUST ROASTED it, in the last day or two. No one sells true premium coffee on-line.
It’s people who want to buy a fancy coffee drink.
You seem to have missed the point that a fancy coffee drink in the hand is a different product from a bag of coffee beans. It’s like the difference between a blouse and a bolt of fabric. And those aren’t even sold by the same companies.
You have said that, but you haven’t supported it. Most of the actually fancy places I shop don’t have on-line stores. They do usually have a web site, but they don’t sell stuff from it. You need to contact them (like, contact a human being) to actually make a purchase. The local fancy cheese shop, the people I buy high-end puzzles from – they deal face-to-face, and can’t be bothered maintaining a live on-line store.
*I’m a food snob, and I’ve identified starbucks with “fake premium” for 20 years now, since they killed the coffee connection in 1995, which really did sell premium coffee. Coffee snobs have been complaining that starbucks over-roasts its beans for at least that long.
You never bought anything there but you received regular mail from them? I’m really puzzled by that. I have literally never known they had an on-line store, and I’ve never heard of anyone buying their products on-line. I’m not shocked that you can buy the beans on Amazon, since you can buy them at the local stuper market. But their own store? (scratches head in bemusement)
Thank you. I think we’re getting into some interesting meat here.
I agree that it seems their online store wasn’t some massive success. The reaction to its demise seems muted online (I just looked at Reddit, too, and there wasn’t much there). I think it’s safe to lean in the direction of believing that the online store was more or less a failure, and the reason given by Starbucks of wanting to drive foot traffic was more or less just BS. That said, even if it was a failure, I doubt it was a palpable burden on the bottom line, either.
I am a coffee snob only in that I won’t drink total crap like Folgers. To me, coffee is a lot like wine: the good stuff tastes a lot alike, and there tends to be wide enough swings in quality that the finer nuances are at risk. Expectations lead to disappointment. (Mini story: Way back in 2006, a local Indy chain called Hubbard & Cravens was an early adopter of the Clover, and they had this perfect Sulawesi-Kalosi, and I had the best cup of coffee in my LIFE from that combo. Strong, fragrant, spicy, but balanced. It was just… divine. But then for whatever reason, their Clover coffees began to taste watery or off somehow, and the magic never returned. They also stopped selling that coffee, which I believe was in fact the best I will ever taste, Clover or not. And it’s the impossibility of delivering that experience again and again that has made me a non-coffee-snob who settles for okay stuff.) Tea, however, consistently delivers.
So, anyway, I largely agree with your points. But H&C has an online store, a lot of places do: Coffee Archives - Hubbard & Cravens Coffee and Tea I’m not in the world of coffee snobs, however, I’m not chasing rare Blue Mountain which would be hard to find locally, so I can’t fight your assertions, but I am skeptical of the claim that snobs never buy online. But I myself wouldn’t. I would just go into H&C and get something. Actually, Limelight here in Indy is really really good, and I buy that at Good Earth. Retail. So I think you are probably mostly right!
I think you are multi-wrong here again. No marketing manager would ever describe a target customer that way. That’s a tautology of no use. It’s like saying the target customer of McDonald’s is someone who wants a Big Mac. Rather, you talk about the attributes of the customer, not the product.
Further, do people even think of a Starbucks drink as “fancy”? Do people think of it as “premium” or anything exceptional these days? Do they draw a line in their minds between Starbucks and Dunkin’ Donuts, and if they do, what are they thinking? I’m sure that Starbucks has a lot of marketing data on this issue, but I’m not sure that we as a society really have a coherent picture of Starbucks is supposed to mean at this point. For example, I can easily describe what Trader Joe’s is aiming for in terms of self-image and target customers as opposed to Kroger. It’s obvious, it’s right on the surface. In 1995, it would have been clear for Starbucks as well: you’ve tried good coffee, you don’t want to drink diner bilgewater, and we’re the only game in town. And we have espresso! You just try making that at home. It’s tough! Today, the world is totally different. My dentist’s office (like a zillion other places) has K-cups and that stuff really tastes just as good as Starbucks’ brew. Lots of people have home espresso machines. Etc. What was once “fancy” is now commonplace.
It’s an obvious point. But if that “fancy” drink loses its back story, it’s not fancy any more. Starbucks does not say to people: our beans are just average, but our baristas are so good, it doesn’t matter. They definitely play up the quality of the beans. What the online store said (literally and also in the McLuhan sense of “the medium is the message”) is that Starbucks’ beans are worth coveting, and that’s a big part of why that “fancy” sugar syrup with a hint of coffee flavor you’re guzzling is something special. Now if you want to say that the online store did a poor job of communicating that message by the sheer fact that few gave a rat’s ass about it, I’d be inclined to agree, as I doubt that the site wasn’t very successful. But giving up on getting that message out is concerning as well (hence this thread).
What would count as support in your view?
A lot of that comes down to having retail channels and not taking business away from them. I am definitely not saying that Prada should have an online store, for example. But if Walmart suddenly ditched their online store and threw up their hands and said, “We just can’t compete with Amazon online,” that would be a totally different story. It would be a huge loss of face and send a negative message. Another example is “bing,” Microsoft’s also-ran search engine. Apparently it just became profitable in the last couple years, but I remember reading at one point that it was bleeding absurd amounts of money, something like $150 M a year (or was it per quarter?!). Just nuts. But Microsoft wasn’t going to accept the loss of prestige of shutting it down.
They switched to Pike Place Roast in I believe it was 2008 to counter that reputation (which was deserved) and introduced blonde roast, etc., but they have never managed to live that down. It’s amazing how difficult it is to change an impression once it is made.
Personally, yeah, I do not think that Starbucks is premium any more, hasn’t been since, say, 2000. I’m surprised that no other chain has managed to attack them on a big scale over the last decade (though they have been attacked in a piecemeal fashion). There are some regions where Starbucks is quite weak. I dated someone in Lansing, MI, and the Biggby chain is all over the place there (not just Lansing, but pretty much all of Michigan except Detroit, from what I could gather), while Starbucks is surprisingly scarce. I mostly go to Starbucks for free coffee: I have the gold card, I ask for a refill, and I get it most of the time.
IIRC, I got signed up for that based on my participation in the rewards website. I just never unsubscribed.
So perhaps her is the essence of what does or does not make sense as a business decision.
Is Starbucks trying to compete as a standalone online store similar to Walmart’s needing to compete against Amazon’s disruptive influence and Microsoft ceding the search business completely to Google (and maybe a wee bit to Ask Siri)?
No.
As has been well established they can and do sell online already via other means. If they want to sell Reserve online they could. The business decision for the online store was if the loss to the middleman was more than the cost of running the site.
For branding purposes? It was not doing much and their branding does not require it.
As to what their brand is right now? It is a bit muddled but I picture them as an international premium brand. They are not the boutique high end for the real snob but they are a consistent higher end product for those who might look down on Dunkin Donuts (although DD coffee in fact aint bad). You can go anywhere in the world and you will know you will get that same sort of experience/quality. Some more premium than others and the Reserve is aimed to compete with the boutique market but online does not seem to be required to do that.