Starbucks Just Threw Out a Strategy It Spent 40 Years Perfecting and It’s Totally Brilliant



For 40 years, Starbucks has built a business on the premise that it could be the “third place” for its customers. While Starbucks didn’t invent the concept, Howard Shultz, the former CEO, was heavily influenced by the idea and set out to create an experience for customers that was about more than just a cup of coffee.

Shultz was heavily influenced by espresso bars in Italy, and the way they became a gathering place for people. For Starbucks, the idea is that you spend most of your time at home or work, but Starbucks would be the third location you spend time working, studying, or just hanging out with your friends. 

Starbucks was largely successful. Its coffee shops were designed to be inviting and encouraged customers to linger. The design style was copied by everything from its competitors, schools, churches, and other businesses. 

Now, after being battered by the effects of the pandemic, Starbucks is trying out another idea. On Thursday, Starbucks opened a concept store in partnership with Amazon’s cashier-less Amazon Go markets. The location, in midtown Manhattan, is designed for customers to pick up mobile orders. Starbucks says it will open at least two more locations (also in New York City) in the next year.

It also features an Amazon Go market, which uses cameras and shelf sensors to keep track of what customers put in their cart and charges them automatically when they leave. Amazon has already opened eight such locations in Manhattan. While the concept store does include seating, there’s something very different about a store where you can order and pick up a drink without ever interacting with a person–especially when that’s by design.

It’s as if Starbucks has decided that instead of trying to be the place you go to spend time, it now wants to be the place you go on your way to wherever it is you spend time.

To be fair, that’s less of a repudiation of its earlier strategy, and more an acknowledgment that the way people spend their time has changed–especially during the pandemic. It’s also a bet that things aren’t likely to go back to whatever normal looked like before March of 2020.

Last year, Starbucks said it would close 400 locations. People are–for obvious reasons–spending less time sitting in coffee shops. Still, that doesn’t mean they don’t want a Latte, or cup of coffee. 

If visiting a Starbucks in the past was all about the experience, the company seems to be anticipating that shift could be permanent. During the pandemic, many Starbucks stores were only open for pickup or drive-thru orders. It turns out, people kept going to Starbucks. 

Even if the experience wasn’t the same, people still wanted to buy their coffee. Perhaps Starbucks recognized that it’s less about the experience of sitting in the coffee shop, and more about having the white cup with a green logo on it while you’re out doing whatever it is you’re doing. 

Honestly, Starbucks’ strategy is still only a concept store. It’s also yet to be seen whether its partnership with Amazon will help it draw in customers on the go who just want to pick up an order. 

Regardless, I think the idea is brilliant, if for no other reason than Starbucks is willing to experiment with the idea that the thing that made it so successful in the past, might need to adapt to the way its customers live and behave. That’s exactly how every business should think.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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