Starbucks, Beta Testing and Food Options

April 03 2014

I was recently in Seattle, Washington, home of Starbucks. Seattle and environs is where they test all of their new concepts and expansion ideas.

They have been focused for quite some time on their efforts to expand into the world of tea with their Tevana Café and website, something I wrote about a while ago. They also purchased a San Francisco-based bakery called La Boulange. I have heard from interviewing Starbucks’ employees that La Boulange has turned out to be a big bust, so that as a result, the company is rethinking their baked good strategy yet again. My old client, Head Cookie Baker Jon Chazen from DoughRayMe, had told me that Starbucks used to purchase and sell day day-old baked goods back in the day, something that has never been denied outright by Starbucks spokespeople or employees. Additionally, they are also trying to grab some more market share in the evenings, trying to attract the younger, typical wine bar audience for a menu of small plates and a glass of wine.


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I heard on the news last year about a Seattle resident, a woman with two kids, who spent all of 2013 eating every meal at Starbucks. Interestingly enough, because she was eating in Seattle, where Starbucks has so many options, including Evolution Fresh juices and smoothies, she did not gain a pound!


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I’m waiting to see when Starbucks will end the beta testing stage and will begin the national rollout of Teavana and wider distribution of the Evolution line. I’ve thought for a long time that they have a huge missed opportunity in the food and baked goods realm, as their customers are actively seeking a one-stop solution for breakfast, lunch and a light meal early evening. Some folks want a decent savory option, and what about the gluten-free folks? C’mon, Starbucks, feed your starving customers in the rest of the world!

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EOS & Their Smooth Moves

March 05 2014

Over the past few years, I’ve noticed the popularity of a colorful egg-shaped Lip Balm amongst twenty-something women wherever I go. This runaway success is from eos, which stands for the “evolution of smooth” and whose tagline “Having a delightful twist on Lip Balm” seems to be working out well for them. The packaging is unique, and compelling, so the allure and differentiation of the product begins on the outside, before you even get to the flavor or color of the balm itself.

I first saw the eos lip balm a few years ago at a charity event I participated in on behalf of MTV’s Save the Music Foundation. The brand is fully committed to their demographic, as evidenced by its product placement in Miley Cyrus’ fun, but highly controversial music video of her summer hit, We Can’t Stop. Lots of celebrity product placement followed, with Kim Kardashian, Kristin Cavallari, and Nicole Scherzinger seen using the “egg”. With the power of celebrity influencers, many young women are using eos daily. At an inexpensive $3.99, eos even rang up sales as a popular stocking stuffer this past Christmas in their target demographic.


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Now, all of you know how much I love mythology, and eos is also the name of the Goddess of the Dawn, who rose each morning at her home at the edge of the ocean. She is usually depicted as a beautiful woman whose robe is woven in flowers, and has wings like a bird. She is considered to be the genesis of all of the stars and planets, and her tears form the morning dew. A name like eos is filled with high aspirations, and the brand would like to imbue this sense of power and authorship into the confident young women who buy their products. Interestingly enough, the brand is marketed only to women – there are no unisex colors, or flavors, so they have clearly marked out their brand strategy to consolidate their market preeminence with their chosen demographic.

It turns out that the company makes other products too, such as hand and body lotion, and shaving cream. Who knew? I wonder how they are doing with these brand extensions, as I’ve only seen that popular egg. My intern carries around her Blueberry Acai egg every day, and my old assistant pulled out her yellow pastel egg at the slightest provocation. Would this brand be as popular without its unique shape? It seems possible, as it is also organic, with fun flavors, which is also totally on-trend, and popular with its target audience. Smart brand, smart design, smart packaging, all very focused, resulting in deep market share.

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No Change at the Cash Register: Confusion at JC Penny

September 21 2013

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Makeovers come in all forms. A little touch up paint, a vase on the corner table, or in some extreme cases a complete, top-to-bottom transformation. It’s an internal process that manifests externally, whether we are dealing with our personal lives or our professional and business lives. Our hope is that we’ll make a room stand out or look more like “us,” or that we can turn around a failing business. The latter is what former JC Penny CEO, Ron Johnson, was going for.

When Johnson came into the position of CEO he determined that JC Penny was having an aesthetic and experiential problem at the retail level, and that it had caused sales to drop dramatically. Apparently, he didn’t feel that the core problem was the rough economy, or that their wide range of competitors had better products or prices. If you followed his short-lived plan of attack then you already know it didn’t go as planned. Sales continued to fall—twenty-five percent to be exact.

Johnson also decided that the JC Pricing strategy needed a makeover. Instead of putting out merchandise at full price and then marking it down later, he thought it would be better to start at a cut-rate price. The brands that JC Penny sells weren’t too happy with the news that their merchandise was being sold at discount, as it devalued their brands and put pressure on them to lower their prices overall. Johnson’s strategy was flawed, since historically, the JC Penny customer is more willing to buy when they think they are getting a deal. These days in particular, bargain hunting is in most people’s blood. If there is no scent of a sale, shoppers are more likely to move on.

Finally, after two years of ineffective strategizing, Johnson was relieved from his CEO duties. The company is now faced with bouncing back from a hole that just seems to be getting deeper. JC Penny needs a visionary CEO who is able to develop a new strategy and positioning that will build confidence and consistency, and that will bring customers back to the brand. Consistency and sustainability are the name of the game in good brand management, even when implementing a shift from existing positioning. Brands evolve over time, or sometimes go through a major reinvention, which is fine. But radically switching gears every few years will drive customers away. Brand confusion doesn’t work on any level.

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