Wake up and make a change

My mantra going into 2008 is, “Never say never.” After all, it doesn’t seem that long ago when people in our business were convinced that imports would never seriously challenge domestic goods. Or that alternative-channel retailers would ever represent almost half the names on our list of Top 25 U.S. furniture retailers. 

But the fact is that these waves of change are affecting all retailers, not just those of us in home furnishings.
Take a look at Starbucks, the once-undisputed king of upscale coffee. If someone had told you a few years ago that McDonald’s, king of the cheap burger, was going to take on Starbucks, you probably would have dismissed that idea as pure foolishness. 

But within the past year, Starbucks has seen its stock nosedive 50%. Meanwhile, the burger boys at McDonald’s are planning to go bean to bean with Starbucks as they brew up a plan to launch coffee bars in some 14,000 domestic stores that will feature gleaming espresso machines and high-end coffee served by baristas. 

If you’re not a coffee connoisseur, Wikipedia defines a barista as “one who has acquired some level of expertise in the preparation of espresso-based coffee drinks.” That’s a far cry from, “You want fries with that?” 

To its credit, Starbucks isn’t throwing in the towel. As part of a recent management shakeup, it ousted CEO Jim Donald and replaced him with Howard Schultz, the company’s chairman and former CEO. 

I first met Schultz in 1982 when I was reporting on the housewares business. Schultz, who was Starbucks’ director of retail operations and marketing, made it clear back then his mantra was, “It’s all about the customer experience.” 

He left a few years later to form his own company, which acquired Starbucks in the late 1980s. 

Schultz recently acknowledged that, in the melee caused by increasing competition and decreasing customers, Starbucks lost its focus on the customer. He promised to bring a laser-like focus on enhancing the Starbucks experience and differentiating it from those of its competitors. 

Good for Schultz. He’s awake and smelling the coffee. Are you?