Monday, September 28, 2009

Stop & Shop and Starbucks - A Not So Perfect Union

Update - April 9, 2010: I posted this blog post in September 2009 not yet having read Kevin Maney's book, Trade-Off: Why Some Things Catch On and Others Don't. It ranks well up there in my personal critique of business books. Most of which I think you can "get-it" in the first chapter. Maney's deserves the full-read. In it, Maney, does a superb job of taking a wonderfully simple concept which I think successful companies execute well intuitively. It has to do with the balance of "fidelity" versus "convenience". In his book, Maney uses Starbucks as an example which to me was a rewarding validation of my blog post below. There is an adaptation of the chapter on Starbucks from Forbes, here. With that, feel free to read my post but without a doubt, pick-up a copy of Maney's book. It's well worth the read.

Around early 2006, Northeast grocer Stop & Shop struck a deal to open full-serve licensed Starbucks in 35-45 Stop & Shop stores over a five year partnership.

Our small suburban town boasts three Starbucks which might be an indication of the demographics. Our Stop & Shop Starbucks opened early in 2007 and would be our fourth.

A short two years later, Starbucks and our Stop & Shop would part ways. I can’t say I’m surprised.

Don’t get me wrong. The idea is nice in theory.

Starbucks is trying to steal market share from Dunkin’ Donuts (a New England institution and a master in convenience) and there are Dunkin’ Donuts in about 100 Stop & Shops.

Stop & Shop is trying to elevate its brand to compete with Whole Foods. By the way, right around the time of the Starbucks addition, a Whole Foods opened in our town. So in addition to Stop & Shop refreshing their image, cleaning up the store and offering an organic food aisle Starbucks should be a perfect fit.

Not so much.

I don’t know if either company did much research to decide if this was a good idea or if they did just didn’t ask the right questions.

My guess is that good research would have identified that while the demographics should indicate that a marriage between these two is a no-brainer, the reality is that the two consumer experiences are at odds with each other and the idea is actually inherently flawed.

My wife and I do our “basic” grocery shopping at Stop & Shop. We do specialty shopping at a local market or at Whole Foods. And we relax at Starbucks, with each other, a good friend or a book and ideally no kids.

Stop & Shop is inherently not relaxing. It’s functional. We don’t go wandering aimlessly through the store taking our time. We go with a list and a job to do and that’s complicated further if there are kids with us. There’s no time for a Non-fat White Chocolate Mocha. We don’t have time to place the order, let alone wait for it.

Stop & Shop is for one thing. Starbucks is for another. It seems like it should have been pretty simple to figure that out.

Funny thing is, Stop & Shop is headquartered a couple of towns away from mine. If they had only asked I might have been able to save them a bit of money.

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