I remember my first time trying Starbucks in Boston. I had always seen American coffee culture in teen movies and shows like ‘Gossip Girl’ and thought it was so cool. Where I come from, espresso or macchiato are the standard coffee choices. We take pride in our espresso and its strong flavor. My parents drink espresso without any sugar; to me, that's incredibly bitter, so I always opt for a macchiato. Walking into the store for the first time felt like I was living the American Dream :D. The range of coffee options and flavors was unimaginable. It was October, the heart of autumn, and my friend ordered a pumpkin latte, which was completely new to me. I asked her, "How can you drink coffee with pumpkin?" In my home country of Albania, we typically consume pumpkin in pies, soups, and savory dishes, so the idea of it in coffee was unheard of.
However, Starbucks experience here in Japan is far superior to that in the USA. It's very clean, offers a seasonal menu exclusive to Japan, and is a nice place to study. Since these aspects stand out, I wanted to share insights on what makes Starbucks in Japan distinct and their success story.
In Japan, Starbucks holds a certain allure or fascination some one would say. The Japanese often associate foreign brands with a "cool" image, showing a preference for 'imported goods from abroad.' This cultural appreciation for imported products, especially from Europe and America, became particularly prominent after the Meiji Restoration. Reference: https://en-culture.net/life/starbucks.html
Let’s dive into history…
Starbucks marked its entry with its first store in August 1996, located behind Matsuya in Ginza, Tokyo. During that era, the Japanese café scene was undergoing significant shifts. Ever since Doutor opened its doors in 1980, offering coffee at 150 yen per cup, there had been a significant drop in coffee prices. This price dip meant Japanese coffee chains struggled to attract customers if they priced a cup of coffee over 200 yen. Given this landscape, Starbucks faced a challenge; the company's business model and branding wouldn't allow them to sell coffee for less than 200 yen. Yet, despite these challenges, Starbucks now reigns as the coffee chain with the most outlets in Japan.
But, what was the secret to their success?
Back then, coffee was predominantly viewed as a drink for men, with the primary clientele of coffee chains being male office workers. Surveys indicated that this demographic didn't have the most favorable impression of Starbucks. However, contrary to expectations, many women held a positive view of the brand. This demographic shift and positive reception from women were unforeseen benefits for Starbucks in Japan. Reference: https://www.ftcompany.site/entry/2017/10/08/214112
Starbucks in Japan offers unique features that distinguish it from the traditional Japanese coffee shops of its time.
Stores’ 4 unique characteristics:
① An interior design, including comfortable sofas and soothing lighting, that encourages customers to stay longer
② Street-facing open terraces
③ A non-smoking environment inside the store
④ Exceptionally friendly customer service
Drawing inspiration from the concept of a "third place" (a space that's neither home nor work), Starbucks allows customers to spend extended hours for study or computer use without imposing time limits. Additionally, Wi-Fi is freely accessible without restrictions, making it convenient for both students and working professionals.
Another interesting branding strategy is that while most shops in Japan greet you with a "Welcome" upon entry, Starbucks forgoes this tradition. They aim to provide a 'third place' experience, and therefore choose not to use the standard greeting. This is a unique Starbucks management strategy. Saying "Welcome" is perceived as one-sided communication from the staff, potentially creating a barrier between the employee and the customer. By omitting this, Starbucks hopes to foster more genuine interactions and open communication.
Starbucks' Strategic Approach
According to Starbucks they don’t merely sell coffee; but it sells an experience. Their primary offering isn't about the "price," but the "value" – the tranquility of their spaces and the unique experience of savoring their coffee. Instead of investing in traditional advertising campaigns, Starbucks harnesses the power of social media for its promotions.
Starbucks' brand strategy rests on five foundational pillars:
① An immersive in-store experience
② Engaging customers through social media rather than traditional mass media advertising
③ Introducing limited-time products that cultivate a loyal fanbase
④ Empowering a workforce that's willing to take risks
⑤ Prioritizing individualized customer service over rigid protocols, fostering a sense of ownership among staff
Starbucks Coffee, established in 1971 in Seattle, Washington, stands proudly as the world's largest coffee chain by 2020. Recognized as the forerunner of Seattle coffee, Starbucks has an impressive 32,660 stores across 83 countries, highlighting its vast global presence.
①What truly differentiates Starbucks is its distinctive brand identity, which revolves around the idea of "savoring delicious coffee in a refined setting". This identity wasn't sculpted through traditional advertising campaigns. Instead, it was crafted through the direct experiences customers had in their outlets. Interactions with baristas, the iconic white cups adorned with their logo, plush seating, the store's aesthetic, the inviting aroma of freshly brewed coffee, and the ambient music – each of these elements played a crucial role. It's these moments at Starbucks, these tangible interactions, that customers grew fond of. This hands-on approach, prioritizing customer experience over media strategies, solidified Starbucks' image.
Further enhancing the brand's ‘aura’ is the classic green apron worn by the staff. For many, this apron evokes a feeling of tranquility and familiarity.
② With a staggering 7.4 million followers on Twitter, Starbucks commands a digital presence that rivals traditional advertising. More than just broadcasting messages, the company emphasizes "listening to the customers who frequent their stores."
This focus on direct customer feedback wasn't achievable with conventional mass media advertising. By engaging deeply and authentically with their fans, Starbucks can foster intimate interactions, something traditional media could never offer. This closeness allows Starbucks to continually refine the in-store experience based on real feedback and build stronger customer relationships.
Moreover, the design of Starbucks stores is distinct. Typically characterized by expansive glass walls and spacious interiors, a quick glance reveals a consistent layout. Starbucks stores have seating for pairs and counter seats positioned towards the exterior, all enveloped by transparent glass walls. When you look from the road, the order counter is strategically placed at the back of the store.
This design isn't just aesthetic; it's functional. Since Starbucks tends to draw large crowds, the exterior seating and large glass facade provide potential customers with a clear view of the store's occupancy. In contrast, many local cafes and coffee shops in Japan have interiors that remain a mystery until you enter inside.
Interestingly, when Starbucks decides to set up shop in a historic tourist area, they ensure the store's exterior resonates with the traditional surroundings, striking a harmonious balance between the brand's modernity and the location's rich heritage.
Starbucks in Kawagoe https://livejapan.com/en/in-tokyo/in-pref-saitama/in-saitama_suburbs/article-a0002443/
③ Their extensive menu caters to diverse tastes, offering everything from hot and cold beverages, coffee beans, instant coffee powder, and espresso to lattes, a variety of teas, juices, pastries, and snacks. Some interesting fact is that Frappuccinos account for approximately 20% of Starbucks' global sales.
Starbucks has adeptly incorporated seasonal limited edition products into its offerings. By strategically promoting these items on social media platforms before their release, the company generates significant buzz. This anticipation frequently results in products, such as the recently launched sweet potato and butter Frappuccino for the Autumn menu which received 9.3 million audience on Twitter. These special items not only celebrate the changing seasons but also drive customer excitement and engagement.
④ A significant aspect of Starbucks' strategy lies in its commitment to its employees. In 2014, Starbucks took a bold step by converting over 800 contract employees to full-time positions. They spend time and money training their workers so customers get the best service. Starbucks believes in this so much that they take risks for it. This has helped make Starbucks a well-known and liked brand.
⑤ Interestingly, Starbucks does not adhere to a rigid customer service manual. Instead, each service decision is left to the individual judgment of their partners. This approach instills a sense of ownership in every partner, empowering them to take full responsibility for all happenings within the store.
In the competitive cafe landscape of Japan, Starbucks leads with 52% of people preferring it, closely followed by Doutor at 46%. These figures shed light on brand preferences and customer choices.
Finally, let’s check the Starbucks' approach in Japan using the 3C analysis, focusing on Customers, Competitors, and Company dynamics.
Customer: Patrons frequenting Starbucks often seek more than just coffee. Their motivations include a desire for a comforting escape, savoring high-quality coffee, and, for some, an aspiration to a certain stylish lifestyle. The Starbucks Reserve Roastery, which offers superior bean quality, is a testament to their commitment to coffee excellence.
Competitor: Doutor, in comparison to Starbucks, positions itself as an everyman's coffee shop. It's accessible and offers drinks that won't break your bank. This affordability, however, has its trade-offs. While Doutor is undeniably popular, its brand prestige doesn't match that of Starbucks. Starbucks, aware of this, carved a niche for itself. It opted for a slightly more upscale approach, emphasizing premium drinks and a chic ambiance.
Company: Starbucks is known for its fancy interiors, top-quality products, and great service, especially from their managers. But, it's not perfect. Some people find it too expensive, and its stylish look can scare some away. Still, Starbucks focused on what it's good at, and that's why it's so popular today.
In this battle of coffee giants, both have found their footing, catering to different market segments and tastes. While Starbucks thrives on its luxury and lifestyle branding, Doutor thrives on accessibility and familiarity.
References:
https://life.oricon.co.jp/rank-cafe/
https://menu.starbucks.co.jp/4524785526310
https://japanbrand.jp/ranking/nandemo/5.html
https://www.starbucks.co.jp/reserve/bar/
https://note.com/ryuka_hato_sem/n/n90b769be1d47
https://livejapan.com/en/in-tokyo/in-pref-saitama/in-saitama_suburbs/article-a0002443/
