Starbucks Brewing Up Changes -- Some Bad, Some Good

Last Updated Jun 29, 2010 9:43 AM EDT

As it plots its comeback from the great store-count implosion of 2008, Starbucks Corp. (SBUX) is doing some tinkering with its stores. It's great to see, even if not all the ideas seem like winners.

On the plus side, the company is toning down its corporate green-and-white color scheme and building stores that look more like homey neighborhood coffeehouses, done in more subtle earth tones. Starbucks' 15th Avenue Coffee & Tea store in Seattle started this trend, which another experimental store in Seattle's busy Capitol Hill neighborhood, Olive Way, will continue when it reopens in the fall after a remodel. Another winner was Starbucks' decision to go to free Wi-Fi -- it had to happen.

Also good: expansion into beer and wine at the Olive Way store, to accompany an expanded menu. The liquor additions seem natural -- after jittering up on coffee all day, you might want to come down with a glass of wine.

But here's one innovation that's more questionable -- Olive Way's move into a layout described as "coffee theater." That is, the espresso machines will be smack in the middle of the restaurant instead of behind a counter. Surrounded by narrower counters, the idea is to bring customers closer and turn coffee making into entertainment.

That sounds great if you're a latte-seeking mom with a couple of squirmy toddlers. The kids would probably be entranced, though you might have to child-leash them to keep their fingers off the machinery. But here's the bigger problem: Espresso machines are loud. And lots of people hang out at Starbucks to do business -- working on laptops or calling clients from cellphones. It sounds like this store design will leave no quiet corner from which to make a call or think about that proposal you're writing.

However that works out, we'll hear more about it, as Starbucks is quietly ramping up its advertising. Historically, Starbucks advertised very little, allotting only about 1 percent of revenue to marketing, but it recently indicated its marketing spending will increase this year.

We'll have to wait and see those ads to determine whether more advertising is a good move. It's an opportunity to help renovate the brand, though -- for a couple of years now, the company has been best known for closing stores, or for letting gun-nuts wave their pistols around while waiting in line for lattes. With a new ad campaign, Starbucks has a chance to redefine what it stands for in customers' eyes.

Photo via Flickr user esparta Related:
  • Carol Tice

    Carol Tice is a longtime business reporter whose work has appeared in Entrepreneur, The Seattle Times, and Nation's Restaurant News, among others. Online sites she's written for include Allbusiness.com and Yahoo!Hotjobs. She blogs about the business of writing at Make a Living Writing.

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