Umair Haque / Bubblegeneration
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Design principles for 21st century companies, markets, and economies. Foreword by Gary Hamel. Coming January 4th. Pre-order at Amazon.

Monday, July 12, 2004

In case you've had your head in the sand, Starbucks has been in the news quite a bit lately thanks in part to Fast Company's July feature - Thinking Outside The Cup. (For more, Ross over at Strategize shares his thoughts). Not to be left behind, Coinstar machines are being piloted in Starbucks.

I remember using a change-consolidating machine once at a Safeway on El Camino. A year's worth of coins had accumulated and I was being forced to move since I had finished my graduate program. My biggest gripe was the 10 or 15% cut it took. I would have been a much happier camper if I had received Safeway points or whatever.

I think we're seeing an interesting shift in leisure-space utilization. People will often spend hours in a coffee house, weather to read or write up business plans (it baffles me the number of times I've seen an Excel spreadsheet at a Starbucks :). In fact, a cup of coffee = a chair near by (think the cup holder industry). Initially we'd seen the integration of coffee shops beside (or even inside) bookstores, which seemed a natural progression; so I find the shift of a music store as part of a coffee shop interesting. Whichever came first is 6 of one, 1/2 dozen of the other perhaps, but I think the Coinstar pilot says more. It looks like Starbucks is asking itself, "People are taking up retail space sipping our coffee and eating our snacks but reading or writing nothing that's ours. How else could we use their time?" The trick question is, "How much of their time do we want to consume?" The beauty of Starbucks is that the attention span given directly to them is minimal - I buy a coffee and pastry, and I get to sit for as long as I like in their couches without being bothered. In fact, this seems a similar dynamic to the laundromat - start the load and the next hour is mine.

Having said that, I think there is a risk the Coinstar pilot may dilute Starbucks' mindshare as a comfortable place for a good cup of coffee. The "I've got a jar of coins - I'll go to Starbucks!" association lowers the name brand, in my opinion...

-- matt // 3:11 AM // 0 comments


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