Dynamist Blog

A Starbucks on Every--and We Mean Every--Corner

Photo Illustration by James Porto for Newsweek

Newsweek reports on Starbucks' real estate strategy and expansion plans:

While it may seem that there's already a Starbucks on every corner, chairman Howard Schultz says the company is just getting started. His previous goal of 10,000 stores in the United States, set in 2002, now appears "light," he says, and the company plans to double the current number of domestic stores to nearly 12,000. To meet that target, Starbucks will speed up its rollout of drive-throughs and kiosks at airports and supermarkets. And it will continue challenging one of the prime tenets of retail: don't locate your new stores close to your old ones. Don't be fooled: the key to its success is not the taste of its coffee. "The two things that made them great are real estate and making sure that no one has a bad experience in their stores," says CIBC World Markets analyst John Glass.

Starbucks' unconventional approach to real estate goes back to an impulse decision by Schultz more than 15 years ago. In 1988 he visited the company's first international store, in downtown Vancouver, B.C., and saw what every retailer dreams about: a busy store. But he also saw customers twitching in long lines as they waited for their coffee. He startled his real-estate broker by suggesting they expand to the vacant lot directly across the intersection. "It wasn't a different neighborhood but it had a different vibe," Schultz recalls. He sensed that each side of the street had its own traffic pattern, and that customers are reluctant to alter their routines or delay their day for a cup o' joe they consider a luxury.

Starbucks is, of course, the touchstone example of the trend I document in The Substance of Style. It's been a pioneer in creating economic value not just from coffee and service but from the look and feel of its store environments--so much so that now everybody "wants to be like Starbucks." But the company's strategy demands more than a standard cookie-cutter style, however attractive. It requires the ability to vary the aesthetic from store to store while maintaining a distinctive Starbucks identity. Here's the relevant passage from chapter four of TSOS:

Effective surfaces, whether for people, places, or things, reveal layers of identity and association while preserving a fundamental sense of self. A graphic identity, says [graphic designer Stephen] Doyle, "is like a personality. You need to be able to take the same person to a black tie dinner and then see them at a barbecue, and then hang out in front of the [television] with them in their socks. It's still the same personality, but adapted for different occasions." The days of the unvarying stand-alone trademark and the single corporate color are over--too impersonal, inflexible, and monotonous for the age of look and feel. The challenge for designers, as for individuals, is to be true to the "self" of underlying identity while still allowing appearance to vary with time, place, and circumstance.

Every Starbucks looks like Starbucks, yet every Starbucks is unique, combining in a singular way elements of the company's language of colors, finishes, materials, lighting, and music. "People are amazed that we have stores across the street from each other," says the company's director of business development. "But they're different stores." The Starbucks design language does more than allow stores to accommodate different spaces or traffic patterns. Following the aesthetic imperative, different store environments offer novelty--a change of pace for regular customers--and personalization. If the color of one store "reminds you of something from your childhood that you intensely dislike, you can go three stores down to a different Starbucks and say, 'I like this better. I just feel better here,'" she explains. By developing mix-and-match elements, Starbucks maintains its aesthetic personality while still suiting different tastes.

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