DISCLAIMER: This is not a sponsored article. The columnist’s goal is to ‘somehow’ guide consumers’ buying decision to make informed purchasing choices.
“Over 320 branches nationwide and 40 million cups of coffee later, PICKUP COFFEE’s signature green carts and cups are now a familiar sight in key cities. Undoubtedly, the Filipino company has remained committed to achieving its vision of becoming the country’s #1 fast beverage brand — with its 3-year growth unprecedented by any other F&B chain.
Driven by their mission to UPlift everyone with delicious and surprisingly affordable beverages, they continue to serve premium espresso in every cup. Each cup is made with 100% Arabica beans that are freshly pulled per order by trained baristas”.
The above information is an excerpt from the official website of Pick-up coffee. I find it necessary to do a research before making an article about this coffee shop which has been ‘making raves’ in the coffee shop industry nowadays.
The concept came in when I availed Starbucks’ ‘Php125-only’ cold coffee promo every Tuesday (originally ranging from Php175 to 180 for its size). I have already tried Pick-up cold coffee from one of its branches in Fiesta World Mall, Lipa, and from then on, I became curious about this coffee shop. It made me start thinking—could Starbucks be offering this price-off promo because of Pick-Up Coffee’s rising popularity? Can Pick-up Coffee be Starbuck’s worthy opponent?
Let’s compare and contrast Starbucks and Pick-up coffee in terms of business model. Starbucks operates on a business model with the goal of giving the best experience to its patrons thru its modern ambience, and convenient physical evidences and services capes which justify its premium pricing strategy. Its largest coffee size can go as much as Php225 (without customization).
Starbucks sells experience rather than coffee cups either hot or cold, and even pastries. The operational costs is way higher than the food cost, so to speak. I learned that their barista promise is to ‘always make things right’ – that is when customers are not satisfied with their drink, the baristas can have it replaced with the right one.
The business model of Pick-up coffee is completely different from Starbucks. As the brand name implies, customers can actually pick-up their orders from any of its branches using its mobile application. This I think is one of its strongest competitive advantages. No other coffee shops has (if I am not mistaken) this kind of business model and it is proven to be very effective for coffee shops especially to those who are always on the go and in a hurry.
A small space is where the brewing takes place for Pick-up Baristas. No fancy lightings and grand ‘physical evidences’ although some of the branches have small and simple dine-in facilities. But the overall store is a depiction of a business operating in a cost effective manner (at least compared to traditional coffee shops that we know that invests in bigger spaces and internal decorations to project a cozy and modern atmosphere). During my first visit, I saw three to four staffs who were surprisingly able to fulfill the orders of customers in a breeze just like any other coffee shops.
Looks like the simplification and economization of the business model of Pick-up coffee have been carefully studied to fit its overall business strategy. It is evident to their unbelievable price ranges that no other coffee shop offering coffee of the same quality could rival. Some customers label it as a premium coffee already comparable to the taste of coffee from coffee shops offering higher price points. The price range is unbelievably as low as Php50.00 to Php125 for their premium coffee products—more than half the price of other coffee shops.
Not just the price, but [almost] all of the elements of the marketing mix have been carefully stitched together for Pick-up coffee to offer a strong value proposition to customers–the product line up that’s unique and sparks curiosity among coffee lovers and the availability and convenience it offers and the marketing communication part is somehow astounding. Buy one, take one and other sales promotional tactics are also Pick-up coffee’s marketing constants.
Starbucks may currently lead the coffee shop industry catering to the upper ABC market segment. However, as consumers’ disposable income shrinks due to inflation and rising taxes, many may begin seeking more affordable alternatives — such as Pick-up Coffee, which offers comparable coffee quality at significantly lower prices.
While Pick-up Coffee targets a different market segment, it’s undeniable that customer preferences shift over time, especially in response to economic pressures. This means that major coffee chains should take note: Pick-up Coffee is a brand worth watching.
Who’s to say this isn’t just the beginning? In time, Pick-up Coffee might rise to compete directly with industry giants.
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