Starbucks the great equalizer: learning from the great global brand

I’ve always thought there’s nothing more equalizing in the modern capitalist world than Starbucks. What many non-profit and government public institution failed to do, Starbucks have accomplished rather successfully.

These days, there are more Starbucks than post offices or public libraries.

My infatuation with Starbucks started in 1992, still fresh off the plane in Seattle. I’ve never heard of espresso at the time, and coffee to me meant cheap, hot liquid that came in a Styrofoam cup — often sold for 25 to 50 cents — or else, Folgers and Taster’s Choice at home. At the time, Starbucks was still a local company that spanned from Vancouver, B.C. to Portland, Oregon. A short (8 oz.) cup of drip coffee used to be 75 cents plus 8.2 percent sales tax in King County, while a tall cup was exactly a dollar.

Since then, Starbucks has come a long, long way. It’s a global brand. But unlike McDonald’s or KFC, Starbucks has managed to retain the sense of affordable luxury.

Perhaps this is why Starbucks is (at least in the United States) a great equalizer. At any given day, CEOs with multi-million-dollar salaries, politicians, doctors, lawyers, public employees, cops, firefighters, housewives, students, blue-collar workers, and the homeless all make their ways to a Starbucks, co-exist in a same space, and cross paths with one another. There’s simply no other place like this anywhere else.

And for the most part, they all get the same thing: some kind of coffee or tea product in the same kind of paper cups or plastic cups (although, some locations do have nice porcelain cups if you request one). CEOs and city councilmen and starving students and the homeless all get the same Starbucks cups.

Of course, this is not an easy task. Many Starbucks stores in large cities have struggled with how to handle the homeless or those who are mentally ill. Some locations responded by requiring key codes for restrooms, removing electric outlets, or by exchanging comfy furniture for less comfortable ones. But for the most part, Howard Schultz’s vision of creating a culture of the third-place has been a success. Starbucks has become a de facto communal living room, as well as a kind of familiar oasis travelers can count on for a coffee break and reliable Internet access.

How did Starbucks do it?

I’m not going too deep into it, but I’d like to point out to a few notable points that I have observed:

  1. Accessibility and approachability. Starbucks is ubiquitous and the brand is well-developed enough so that most everyone knows what to expect. It is everywhere, it meets you where you are, and it is not off-putting or intimidating. Most locations, even during winter, put out tables, chairs, and umbrellas outside to create a welcoming visual.
  2. Diversification of products and prices: At Starbucks, your coffee can be as simple as you wish it to be, or as fancy and complicated as you wish it to be. But even if you ordered something on the lowest scale of the pricing range, there is no stigma there — a tall cup of Pike Place Blend drip coffee comes in exactly the same package as a tall cup of caramel soy vanilla Latte. At some places, you can even pick the kind of coffee roasts and blends and have it made on the spot with a Clover machine (the most expensive coffee maker on Earth, originally created in Portland, Oregon). The price range can vary from $2.15 to somewhere around $10.00 (the pricing for the Portland, Oregon region) for what one calls a “cup of coffee.”
  3. Feeling of specialness: When the Great Recession hit a decade ago, Starbucks’ stock price was already on a free fall. The company closed lots of stores, most of them were newer stores that opened circa the mid-2000s as part of the ill-conceived rapid expansion strategy. But Starbucks did not lose its loyal customers, even when many of them lost their jobs and they did indeed cut back on spending. Why? Starbucks still offered a feeling of getting a luxury product at a relatively low price. The reality is, Starbucks wasn’t selling life’s necessities — and those who are in need for cheaper caffeine could go anywhere — but it is the specialness of getting some caramel latte sitting in a comfortable atmosphere certainly beat the miserable feeling you get with a 3-hour-old, 99-cent cup of 7-Eleven coffee.
  4. Something for everyone/no one feels out of place. This leads to this fourth point. Starbucks has indeed something for just about everyone. No one steps into Starbucks and feels out of place. If you are a Fortune 500 CEO you might feel like you just stepped into a strange land when you find a McDonald’s. If you are a scruffy homeless person who just woke up at 4:30 in the morning, shivering in freezing rain, Starbucks (generally) doesn’t make you feel unwelcome (as long as you behave and mind your own business).
  5. Focus on core competency and core brand message. Starbucks is now considered the world’s top coffee retail brand. When it started, it sold coffee, tea, and spices. It was Howard Schultz, then-owner of Il Giornale coffee house in downtown Seattle, who put Starbucks on its current path. From time to time, Starbucks tried to venture out beyond coffee and into the food business. In the mid-1990s, it opened a sit-down restaurant called Caffe Starbucks in Seattle’s Madison Park neighborhood and failed. More recently, Starbucks took over ownership of San Francisco’s bakery-cafe La Boulange, only to shut it down and retire its brand from Starbucks’ bakery products. Starbucks even tried to go into wine, beer, and tapas business with its “Starbucks Evenings” locations–which also failed and quietly disappeared without any fanfare. It seems that every time Starbucks veers away from its focus on core competency and brand message, it flops (but it hasn’t learned the lesson). Starbucks, on the other hand, is doing well with its Roasteries, now having three locations (Seattle, Shanghai, and Milan) and three more to open soon.