An article this week in HBS revealed that Starbuck’s is to close some 600 US stores. HBS put it down to 3 reasons: disenfranchise early adopters, too many products and superficial growth from too many stores and products, which in many ways boils down to this: “they delivered a lousy customer experience”. More importantly they made the mistake that Facebook are making - they forgot who really owned the brand.
Starbuck’s thought they owned the brand and in pursuit of earnings to satisfy the markets they grew like crazy and changed the brand and therefore user experience. Soon getting a coffee in Starbuck’s was no longer about the laugh and joke with the Barista, the remembered regular order and the great coffee sipped at a well positioned table from a comfy chair. Rapid service and more choice than you can remember took precedence in the pursuit of growth.
When will brands realise that sometimes you have to sacrifice growth for sustainability? For sure the market puts enormous pressure on businesses but this is a chicken and egg scenario and greed wins out. It is certainly difficult (I imagine) to become a gozillionnaire by pitching up to a VC and saying “we won’t grow that fast but we will be profitable and our customers will love us”. But it would be nice to think that somewhere out there another Amazon exists.
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