Starbucks: Did They Jump the Shark?
Note: we are jumping on board with Jay Ehret and company over at "The Marketing Spot" to provide commentary (and advice) on Starbucks and its ongoing efforts to remake, fix and improve its business.
The image at left is the July 2004 issue of Fast Company. As you will note, the lead cover story is about Starbucks. "Thinking Outside the Cup. Surprise! Starbucks is making a bold push into music."
The question, as we sit here in 2008, is: was it a bold push, or an ill-advised push?
The Fast Company article postulates that Starbucks foray into music, providing downloadable music for purchase in its retails outlets, would in disruptive fashion render traditional music vendors such as Tower Records, HMV and Virgin Megastore obsolete.
"What Schultz had come across was a group of music stores with something of a cult following in the Bay Area. Hear Music was one of the first stores in the country to introduce the now-universal concept of the 'listening station.'
In its intimacy, quality and customer focus, Hear Music must have reminded Schultz very much of his own company. And the rest of the music industry must have looked a lot like Maxwell House."
"We never dreamed we'd be sitting on the unique opportunity we're sitting on now," he said. "We just saw that they were doing for music what we had done for coffee."
Unique? That would appear to have been a stretch. What each player had done was innovate. But then Starbucks attempted to replicate, instead of innovate.
"What you're left with is this very broad audience, made up of the core Starbucks customer, who loves music and can't find it, Schultz said. "We have a unique opportunity to take advantage of this."
No doubt, the psychographic potential of the brand extension was alluring. But what about iTunes and other online music vendors? Did Starbucks underestimate their potential and power ... their competitive threat? Were they, perhaps, caught off-guard?
There's a phrase in the movie and TV business--"jumping the shark." It's that fateful, irreversible moment when the program, or series, goes too far. It strays too far from its core concept or storyline ... and loses credibility. Typically, such shows do not recover.
In my estimation, this article from July 2004 captures for posterity that moment when Starbucks jumped the shark.
Cut to February 26, 2008. Starbucks closed every single one of its stores for three hours. They spent that time getting back to their essence, their core. They took 3 hours (times 7,100 stores) to train their baristas (employees) on how to make and serve great espresso. Here's the corporate news release on this event. This equates to 500,000 hours of training time.
I applaud Starbucks for this tough, but necessary, refocusing intiative. Time will tell its impact. Still, I remain a devoted Starbucks fan and customer, and I wish them well.