This month Starbucks closed its online store. In April of this year Executive Chairman and former CEO Howard Schultz took a stand in front of his investors: “Your product and services, for the most part, cannot be available online and cannot be available on Amazon.” In a time when brands are investing in omni-channel experience, Starbucks makes the bold move to close the foundational web channel and focus on the in-person experience.
How big is the risk Starbucks is taking of losing loyal customers who buy merchandise online? Companies like Ryanair and IndiGo designed check- in for flights primarily on their apps and their customers adapted accordingly. Over time, customer behavior follows the design put in front of them. Yes, some Starbucks customers will miss their pumpkin spice syrup. The loss of their loyalty though will free capital for Starbucks to create an even more seamless app experience and re-imagine its physical spaces. That sounds like a great trade off in the long run!
This is not the first bold move Starbucks has taken. In 2011 the brand dropped the name Starbucks and the word coffee from its logo. Around the same time the company began testing its “evening program” and expanded its product offering to include wine and beer in select locations. With those tactical moves the brand strategy emerged – Starbucks was trying to reposition itself as a lifestyle brand. In January 2017 we heard the last call on the alcohol idea. With the closing of the online store it is clear that the brand is on to the next approach toward the goal of lifestyle brand presence. Will the brand be successful this time?
Smart brands make bold decisions to drive the customer where they want him/her to be. The only way to drive customers to a desired channel is to take away their choices. As long as the choice is available, customers will make it. It is clear that Howard Schultz wants us to be in his stores. But unless he gives us an immersive experiences with cleverly designed space we might not stay there long.