Starbucks, without needing to cite sales or market share figures, is undoubtedly the undisputed coffee shop in the world and has already been taking the Philippine coffee shop industry by storm evident to its ever-growing number of stores and jam-packed outlets and long queues. This global coffee giant is a go-to place for coffee enthusiasts not just due to its signature beverages and pastries but also to the cozy ambiance that it provides to its patrons.
Overtime, it has already built a very robust and solid brand equity here in the Philippines. Brand equity is a value that a brand derives due to its strong points of differentiation in the eyes of its target consumers which helps cultivate loyalty among them, which then add up to business viability. Much more when SB Philippines adopted an OPEN-DOOR policy –which means an invitation to ANYONE to enter its store premises, relax and spend hours inside WITHOUT the pressure of having a minimum spend.
I can’t help but to remember a content creator who went viral with a video where he shared his culture shock experience here in our country. He was not comfortable with the fact that Starbucks customers in the Philippines would often buy just one cup of coffee and then stay in for long hours, working on their laptops or chit-chatting with friends. However, the content creator faced backlashes from Starbucks patrons, who defended the practice. Some of them pointed out that as long as they had made a purchase, it was just fine to stay and enjoy the space. Some even asked him “If it’s okay to stay after buying a drink, lalo na kung hindi kami bumili?” . This question might have came from the fact that there are some who stay inside the store premises, and even use the store’s facilities (i.e., comfort rooms, etc.) without purchasing.
However, surprisingly, Starbucks Philippines has just announced its reversal of open-door policy—meaning it is now implementing a more restrictive measure to those who wish to stay inside the store. The company now requires customers to make a purchase before they can use the store’s space more especially to those who use laptops or those who engage in prolonged activities like having appointment and meet-ups.
Even though it may have a repercussion to the brand image of Starbucks, this can be justified by the company’s strive to become more profitable and viable more especially during a situation wherein there is a spike in demand and the supply cannot be increased further particularly to the spaces that it can provide. Overpopulation and rapid urbanization can be seen as the two precursors behind these challenges when the demand for store space outpaces the available supply that every Starbucks store has. Starbucks decision of reverting its open-door policy can be traced by the operational bottlenecks and unattended consumers (more especially during peak hours) when there are customers occupying seats with minimal or even no purchase made. These scenarios can cause frustrations among buying customers in which they have no option but to leave the store and look for other coffee shops where they can comfortably sip a coffee without waiting for too long.
As a Starbucks regular patron (especially during Christmas season, where collecting stickers shall be done on a daily basis, even if it hurts my pocket, to complete the required numbers so as to get a free Starbucks merchandise) I have been a witness to jam-packed Starbucks stores and some customers have no option but to leave due to space constraints. And as a business and marketing professor, for me, Starbucks’ move of reverting its open-door policy may have been less about alienating its customers but it is bold and appropriate to sustain its business operations. Businesses are not always on its prime, so to speak. There are lots of coffee shops out there who could possibly be a worthy opponent of Starbucks in terms of popularity and brand equity. Business owners must realize that every square foot of its space is precious and Starbucks just wanted to ensure a quick turnover so as to ensure profitability, hence reverting its open-door policy.
Starbucks’ move is in line with the positioning strategy that it has that lies within the difference and uniqueness that it has over other coffee shops. Starbucks always wanted to tell its customers that they do not sell coffee, they sell EXPERIENCE. And this move could be of great help to maintain what they want customers perceive the brand as a place wherein they can comfortably sip a coffee without a hassle and an experience that they can never get from any other coffee shops.
The question now is how Starbucks Philippines will be able navigate the fallout or the drawback from this change that they have implemented. Will it continue to thrive as a premium coffee brand with a slightly more traditional retail experience, or will it risk alienating a segment of its loyal customer base?|
