Thursday 23 July 2009

Starbucks 'stealth' rebrand

There's been a lot of coverage on the 'stealth' rebrand that Starbucks are trialing in 3 stores in Seattle - and it raises two really interesting points. If you haven't read anything about, you might want to read this. If not, this is a very brief summary:
To address flagging sales Starbucks are relaunching 3 stores, each with a unique, 'bohemian' brand, in an attempt to get away from the corporate Starbucks feel. The first, due to open this week, is called 15th Avenue Coffee and Tea. As well as a different look they will also sell alcohol and have live music.

So here are those two 'interesting points'.

Brand
Anyone who has read any of our Brand Tips will know that brand is not one thing. A company has four brand 'touch points' with their audience: Product/Service; People; Communication; Working Environment. Brand touches every corner of a business and the Starbucks approach is an interesting demonstration of that principle. To address a fundamental business issue - falling sales (a change in customer behaviour) - Starbucks are looking to their brand to turn things around, by repositioning 3 of their stores.

So what are the changing?
Product / Service: They're offering new products not previously available - alcohol. They're adding new services - live music.
People: I don't know for sure, but I'm guessing that staff in the rebranded stores are working from a different script so they may well be sounding and behaving differently.
Communication: Well the name's different, and I imagine the rest of the instore graphics look pretty different too.
Working Environment: The new interior has been described as 'bohemian' and 'mercantile', a shift away from the corporate uniformity.

So in every area of the business there are changes, in an attempt to reposition the new stores. The brand is the key tool in addressing the business challenge of falling sales.

Business Strategy
Reading the Starbucks story took me back to a blog post I read last week on BusinessWeek about business strategy in a recession. In actual fact there are only two strategies available in a recession: You can step up to the challenge, or step down from it.

With this 'stealth' brand move they have clearly stepped up to the challenge, making a bold move to address a specific issue. Obviously Starbucks have deeper pockets than a lot of businesses, and can afford to experiment, but it's not about the scale, it's about the principle. According to the BusinessWeek story, studies of previous recessions show that companies have twice as much opportunity to improve their position during a recession.

Now, I'm not commenting on the ethics or authenticity of this move by a global giant - I'm just interested in the brand angle... and what the outcome is.