09 Mar Starbucks, Restoration Hardware, the evolution of Retail and what happened to your cup of Joe?
As my new weekly discipline, I will be creating a blog post about the most read article from the previous weekend’s ICONIC newsletter. For my first attempt, we look at the Business Insider article from 2/28/18 which can be found here.
Click here to Subscribe to the ICONIC newsletter.
What happened to your morning Joe?
The ICONIC newsletter readers were most interested in the article on Starbucks’ newest Seattle prototype. At nearly double the size, with an in house bakery and a bar, not just a coffee bar either but actual bar. So what is really going on here? We meandered through the six levels of the historic building that showcased all the brand has to offer for nearly 3 hours while we waited for a table at the cafe. The ground level areas were filled with bachelorette parties relaxing on over stuffed sofas drinking bottle service champagne by the bucket and there was the constant flicker of camera phones and selfies filling the atrium and fountain area as we dined. While my wife and I were there to look at dining room tables, we did not purchase anything on the spot, other than our lunch and a bottle of wine. What is interesting to me about this is, we likely will purchase one of the tables we saw, and as a result Restoration Hardware has scored on a new strategy to monetize their real estate: create an experience around your product, showcase it in as many ways as possible, keep people in and around your sales environment for prolonged periods of time. Many brands are following suit, Detroit’s own Shinola is well known for having pop-up florist and barista’s in their showrooms as well. So what happened to your morning cup of Joe? Exactly that. This is the evolution of the modern cafe, real estate doesn’t sleep and rent expenses for the most part are fixed. So how can a brand drive greater profitability? Keep the audience for as many hours of the day as they can. By adding an on-site bakery, they bring in new aromas and tastes, this broadens the appeal beyond the morning coffee. Showcasing all the different and interesting ways coffee can be brewed continues to educate and expand product offerings, creating new opportunities for up selling, and adding alcohol expands the functional hours of the space all adding up to immersing the consumer in a Starbucks world.
Thank you for reading, I look forward to hearing your thoughts on the topic, so please comment, email or call!
Kees- Managing Partner, ICONIC Real Estate