5 Ways Starbucks Turns a Global Business Into a Local Brand
When most people think of a local business, they imagine the neighborhood store or the mom-and-pop restaurant. But more and more today, global brands are positioned to use to digital tools to capture the relevancy and responsiveness that is at the heart of local businesses.
The prospect of a new Starbucks opening in a particularly protective Montreal neighborhood has brought this debate to the forefront for the brand. Thousands of people have signed a petition to stop a new Starbucks from opening near the beloved Jean Talon farmers market, claiming the global giant will cheapen the “authentic” neighborhood experience and hurt local cafes in Montreal’s Little Italy neighborhood.
The fact that there’s already a McDonald’s down the street from the proposed location seems to escape notice. Starbucks, arguably one of the most aware brands when it comes to tailoring individual locations to local contexts, is getting called out as a global brand bully, not fit to operate in this “local” enclave.
Starbucks goes to great lengths to fit into local contexts, but it’s difficult to scale local customization across their 23,000+ stores. The concept of “local” for Starbucks must fit into a global context by making their customers feel like any location they walk into will have both the brand consistency of any other Starbucks, and the local flavor of their neighborhood coffee place. This is where the coffee giant uses digital to make customers feel like the nearest Starbucks is “their Starbucks”.
Let’s take a look at how Starbucks is using physical and digital tactics to instill a sense of local.
1. Starbucks carefully designs their physical locations to cater to local, cultural nuances.
In China, the company combated a regional dislike of coffee by bringing in coffee-free beverages like a red bean frappucino. In North America, the brand has tried opening “Stealth” stores that don’t include the Starbucks branding or logo and host poetry readings, in an attempt to win over people who prefer getting their coffee from “independent brands.” This “local washing” technique backfired in some cases.
2. Starbucks designs stores for the local consumer.
In large U.S. cities, the design caters to individuals or pairs coming in single file to buy their coffee and leave, or who don’t mind sitting next to a stranger at a large table. In Asian countries, Starbucks designs their stores to cater to larger groups of people, creating a more adaptable seating arrangement with more easily-moveable tables and chairs.
3. Starbucks’ digital strategy is consumer-centric
From the moment you sign up, the Starbucks app collects information about to target you with offers that are thoughtfully woven into the entire Starbucks experience. They reward the forfeit of information with personalized perks, like a free birthday coffee and notifications about stores near you.
4. A seamless transition from online interactions to the offline experience (O2O).
Starbucks’ customer path to purchase through their app is a great example of an optimized online-to-offline experience.They feature their store locator prominently on the first page of the app so finding a brick-and-mortar store is as simple as possible. Once you’ve chosen a location and placed your order, you can pay directly from your device. Their loyalty program is another key O2O pathway, rewarding regulars with freebies to get them coming back to the store.
5. Subpar local search marketing is letting them down
It’s all good if you’ve got the app, but without it finding a Starbucks can be a challenge. Global brand’s need to dominate local search to ensure their capturing local intent. Local listings can be used as an extension of what a good store locator page in an app already does.Using our Local Marketing Index data we can see that Starbucks is lacking in their local marketing game.
- 59% Listings coverage. Global brands need local listings. Lots of them in lots of places. Starbucks only has 57% listings coverage, which means they’re missing out on a lot of local conversion opportunities.
- 50% Listings accuracy. Starbucks only comes in at 50% listings accuracy which means that half the time someone sees their listing information it contains errors. This hurts the brand and reduces sales.
- Average Brand sentiment. Despite a high number of reviews per store, Starbucks’ average star rating is 3.5 which isn’t bad, but it’s not stellar either (Peet’s and The Coffee Bean both clock in at 3.9). Starbucks could benefit from monitoring and responding to negative reviews.
What stores get to be “local” will always be defined by local communities, but Starbucks and other global brands, can win new customers and grow their market share one location at a time by embracing local strategies.
Mohannad El-Barachi is co-Founder and CEO of SweetIQ. Since the late 90’s, Mo has been aligning business and technical strategies to help build everything from digital asset management systems to roaming mobile telephony platforms, in Canada, the US, Egypt, the UAE, and Vietnam. Today, he runs SweetIQ, helping brick and mortar store owners leverage the power of online local search to drive and measure in-store foot traffic.