Monday, July 7, 2008

Starbucks Brand Watered Down?

Recently Starbucks announced is was shuttering 600 under-performing locations to try to get their sagging balance sheet back in order. The premium coffee brand is feeling the heat from investors and customers alike.

Not only are things not going so well for Starbucks, but there are people who are rooting for their downfall. How could this be happening to Starbucks--arguably one of the hippest, coolest, well respected brands ever? Was it the rapid growth, the soft economy, new competition, product issues, or the natural cycle for what amounts to a casual dining restaurant brand?

A recent Reuters article on the subject illustrates how consumer sentiment has turned on the coffee giant. Here are a few quotes:
  • "I'm so happy. I'm so not a Starbucks person," said Melinda Vigliotti, sipping iced coffee at the Irving Farm Coffee House in New York. "I believe in supporting small businesses. Starbucks, bye-bye."
  • "Amen," chimed in Keith DiLauro, a local caterer. "They went too big, too fast."
  • "Starbucks was a cool brand, and then all of a sudden it's not a cool brand," he said. "There's this new global consciousness that is out there that can suddenly shift."
  • Indeed, said Pye Parson, who hails from Seattle and works at Birmingham's Crestwood, "Once it went corporate, it wasn't Starbucks anymore."
  • "The people that work there are very pleasant, but the stores are devoid of any kind of real charm or personality," he said. "They push a button, and a machine does everything from grinding the beans to brewing the drink."
They found some positives comments too:
  • "It's convenient," said Anthony Castro, sitting in a Starbucks near his job at New York's Museum of Modern Art. "I know what to expect."
  • In Birmingham, Crestwood regular Gary Adkins said he felt Starbucks gave employees good salaries and benefits. But now Starbucks' plans call for cutting up to 12,000 full- and part-time positions.
  • Not everyone felt strongly. "It's just coffee," said Marc Poulin, a systems administrator at Zibetto Espresso Bar in New York. "If I was an investor, I'd care."
Here's the link to the complete article.

I couldn't help but think as I was reading this story that radio station call letters or companies could be substituted for "Starbucks" and we would not be too surprised. Let's face it, if Starbucks can fall out of favor so can radio. This quote is worth repeating:
  • "The people that work there are very pleasant, but the stores are devoid of any kind of real charm or personality," he said. "They push a button, and a machine does everything from grinding the beans to brewing the drink."
Now, let's change it up a little:
  • The DJ's are very pleasant but are devoid of any kind of real charm or personality. They push a button and the computer does everything.
The good news is that radio stations and their on-line stablemates are living and breathing entities that start every day with the opportunity to deliver content that was better than what was on yesterday. Or we can be just another provider of audio entertainment in a sea of audio entertainment providers.

What's better about your radio station today?