I Wonder if Book Stores Have Tried This?
TJIC points out a dynamic in coffee houses I have also observed at work among restaurants:
…Strange as it sounds, the best way to boost sales at your independently owned coffeehouse may just be to have Starbucks move in next-door.
That’s certainly how it worked out for Hyman. Soon after declining Starbucks’s buyout offer, Hyman received the expected news that the company was opening up next to one of his stores. But instead of panicking, he decided to call his friend Jim Stewart, founder of the Seattle’s Best Coffee chain, to find out what really happens when a Starbucks opens nearby. “You’re going to love it,” Stewart reported. “They’ll do all of your marketing for you, and your sales will soar.” The prediction came true: Each new Starbucks store created a local buzz, drawing new converts to the latte-drinking fold. When the lines at Starbucks grew beyond the point of reason, these converts started venturing out - and, Look! There was another coffeehouse right next-door!
One wonders if smaller niche book stores, who complain about Borders and Barnes & Noble, have had any similar experiences.
As to the part about "When the lines at Starbucks grew beyond the point of reason," I can say from my limited observations as a non-coffee drinker that there are a lot of things wrong with the Starbuck's model, particularly vis a vis lines. First and foremost seems to be that their production process doesn't make a lick of sense. I'd have been laughed out of the room in almost any operations course if I had proposed the production process they use to deliver coffees. At some point, people are going to realize that waiting in lines does not have to be part of the coffee experience, and then Starbucks is in trouble.
For years, the Einstein's Bagels near me had the worst production process I had ever seen. People had to criss-cross one another constantly behind the counter just to complete one order, and the assembly line, from ordering through payment, always had a horrible bottleneck somewhere, thought the bottleneck moved around as they played with staffing. Every Saturday morning the line and wait would be awful. I pretty much had given up on them when they suddenly closed for three weeks. When they reopened, they had a new layout behind the counter, new electronics, and a whole new process. Since then, I have never seen a line longer than 2 people even in peak periods. And look at Southwest Airlines. They have reinvented their boarding process for about the third time (and I like the changes). Is it really possible that no one at Starbucks has thought about re-engineering the coffee delivery process?
Posted on January 6, 2008 at 08:27 PM | Permalink
Did you know Einsteins went bankrupt, were bought out by another chain, which basically went bankrupt again, and now are run by another management team that seems to be profitable? I'll bet the change happened during that last switch in ownership.
And, the worst has to be Paradise Bakeries. First you have the coffee & cookies counter, so if you want some of those, you better stop there, but if you just want one cookie, go on because they give you that anyway. Then, you get to the sandwich counter & they only do sandwiches, even if you order a soup & sandwich combo, then the salad counter with the same deal, then the soup counter. Then, you get to the cash register where they look down at your tray & ring you up, then you say, "Oh, wait, they are still working on one of my sandwiches." Then they ring you up again, and you say, "No, that soup was part of a combo - oh, was I supposed to order a cup instead of a bowl for that?" Then they ring you up again & if you're lucky you can move on to your seat.
Posted by: kebko | Jan 6, 2008 8:57:10 PM
I suspect it doesn't and wouldn't work for the mom and pop book stores. That is, assuming it's the spill-over from Starbucks that gets people into the local coffee store next door. If you stop in to grab coffee, I would think you're in a mood to get in and out. So much of a line will discourage you. For books, I suspect there isn't that same rush causing a line. And if there isn't you're not in the mind set of wanting to get in and out as fast as possible.
Posted by: Allen | Jan 6, 2008 10:18:45 PM
What's more...StarBucks coffee is awful.
I'm a coffee hound. I drink a LOT of coffee. Two pots a day...minimium. Pots...not cups. I've been doing it for thirty years since I was in the Air Force. I've had a lot of bad coffee. Starbucks is bad.
I never understood how Starbucks could make money selling a bad product. Cool name though.
Posted by: Everitt Mickey | Jan 6, 2008 10:27:12 PM
I'd suspect that Starbucks creates alot of customers, where BN does not. So when a starbucks moves in, they can't serve all the new customers and the spillover goes elsewhere.
A new BN does not create new readers, and even if it did, the BN would be able to serve them.
Posted by: dave smith | Jan 7, 2008 8:07:04 AM
I wonder if it works in reverse. Drive around and find a Starbucks with long lines then open up a competitor right next door.
Posted by: mjh | Jan 7, 2008 12:20:23 PM
MJH, yes, it works. From the Slate article that triggered Travis' posting:
Hyman's new neighbor boosted his sales so much that he decided to turn the tactic around and start targeting Starbucks. "We bought a Chinese restaurant right next to one of their stores and converted it, and by God, it was doing $1 million a year right away," he said.
Posted by: Kevin | Jan 7, 2008 1:23:52 PM
The inside scoop is that Starbucks has the shopping process down to a science. Not only have they thought of how long it takes to get through the line they know precisely how many seconds it takes to convert a ordinary coffee sale into - say a scone with that, or maybe one of the crappy jazz CDs they have strategically placed near the line. This is not conjecture - I worked on a large complex project that was intended to do nothing more that add a few seconds to the linger time near the pick-up counter.
The better question is - how long is too long? There must be some point of deminishing return on the linger time.
Posted by: Greg | Jan 10, 2008 10:33:57 AM
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