On what drived Starbucks into the business of charging cars
Lately, Starbucks partnered with Volvo and announced a plan to install EV charging stations at their 15.000 US highway locations. In other words, Starbucks is switching lane, pivoting into a business that’s no longer coffee making.
Surprising as it is, it’s not that illegitimate for Starbucks to go from coffee maker to electric ‘gas’ station when you take interest into what drives Starbucks decisions as a brand: their narrative.
The Starbucks origin story usually sounds like this: Some guy goes to Italy, finds out how the italian life revolves around cafes and espresso bars and decides to import the concept to the United States. To a large extend, that’s all there is to it. But that wouldn’t convey what really led to the success of Starbucks and its strategy.
Starbucks Coffee Company started on March 30, 1971 in Seattle, as a retailer of whole coffee beans. In 1982, Howard Schultz joined as director of retail operations and marketing. Although the company wasn’t founded by Schultz himself, he’s credited with the success of Starbucks as we know it today. He’s the guy that went to Italy.
When Schultz came back from a buying tour in Milan, he tried convincing the board of Starbucks to start selling coffee in addition to selling the beens. The board not willing to invest in the idea, he started, in 1985, his own coffee bar: ‘Il Giornale’. After two successful years in the coffee making business, he managed to buy the Starbucks assets (most importantly the name) from the original owners and renamed all his stores.
So it’s not so much a guy that saw an opportunity to sell the italian lifestyle and overpriced coffee to the US public. It’s a guy that believed so much in the added value of the experience he lived in Milan that he was willing to quit his position and start a new business from scratch. Schultz strived to emulate something more with his store chain. In 2018 he writes in ‘An open letter to Starbucks customers from executive chairman Howard Schultz’ :
“In 1983 I took my first trip to Italy. As I walked the streets of Milan, I saw cafés and espresso bars on every street. When I ventured inside I experienced something powerful: a sense of community and human connection.
I returned home determined to create a similar experience in America—a new “third place” between home and work—and build a different kind of company. I wanted our stores to be comfortable, safe spaces where everyone had the opportunity to enjoy a coffee, sit, read, write, host a meeting, date, debate, discuss or just relax.“
Call it vision, ‘raison d’être’, purpose, cause or whatever you’d like, it is the unique point of view of Starbucks. The guiding principle that goes beyond the product they sell: be the third place.
If you think being able to get a Starbucks in a train station, a subway station, an airport or a highway resting area is an accident, think again.
As far as I have been able to track it down, the origin of Starbucks’ current narrative —the idea of being the third place— dates back to 1995 and can be found in an Annual Report of Starbucks Corporation in a message written by Schultz:
“You get more than the finest coffee when you visit Starbucks. You get great people, first-rate music, a comfortable and upbeat meeting place, and sound advice on brewing excellent coffee at home. At home, you’re part of a family. At work you’re part of a company. And somewhere in between there’s a place where you can sit back and be yourself. That’s what a Starbucks store is to many of its customers – a kind of ‘third place’ where they can escape, reflect, read, chat or listen.”
And if, in its early days, Starbucks was more of a ‘grab-and-go’ experience on your way to work. Its narrative helped drive growth and develop the business further. It shaped the logistic aspects of the Starbucks’ expansion. Because, ultimately, what are the best locations to open a store when your mission is to offer your customers a place somewhere in between home and work?
If you commute to work, you can find Starbucks everywhere on your way there. If you live in the cities, you can find a Starbucks store on every corner, then again likely to be between home and work.
To deliver on this notion of the ‘Third Place’ their values support the brand effort. For exemple, one of Starbucks value aim to create a culture of warmth and belonging, where everyone is welcomed. How does that show in the business strategy? Remember your first or last Starbucks experience? They did ask your name, right? Well, it ain’t for the show. They ask your name, because it serves their mission, by bringing the simple coffee shop experience to a more personal level. Although today it feels a bit generic or inauthentic, it’s a tactic that served to implement the Starbucks narrative and its values.
In preparing this article I read an opinion piece by Matthew Dollinger on the Fast Company website where he says: “It never really was about the coffee to me with Starbucks… When I think about Starbucks, I think about comfy chairs, great smells, pretty people and wifi.”
I believe a lot of people feel the same.
This notion of third place is an ideal that has driven the business, the human ressource, the logistic and the branding decisions, leading almost everyone to see Starbucks as something more than a coffee joint.
If you search for the term ‘third place’ in the Stories & News sub domaine of the Starbucks website (see here https://stories.starbucks.com/) you’ll find 170 entries.
Making sure everyone’s on board with the narrative is not an accident or a one time commitment. It’s a non-stop effort to communicate and further this vision. When Starbucks takes a vow to be the ‘third place’, it is their responsibility to keep this promise to date. Not only are societal events —like the one we’ve experienced with the pandemic— a testament to a narrative’s strength and legitimacy, so are daily customer’s experiences.
It is a double-edged weapon for brands. On one side, it helps build consistency, guide decision making inside a company. It’s the best tool to federate and synergize team members, as well as drive business innovation and change. But on the flip side, it takes a lot of work to maintain such clarity as the company grows. It’s a constant work, but a simple work: look the world through the prism of the narrative, always.
So, when I read that they were preparing to launch a pilot this year on the 2200 km route from Denver to Seattle, I knew this wasn’t such a farfetched idea. It is the continuation of their effort to bring ‘the third place’ to life.
Now sitting at a ‘gas’ station for 30 or more minutes might be a win-win for both Starbucks and the consumers.
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