Starbucks is reimagining the core belief that turned the chain into a $88 billion juggernaut
- Starbucks is reimagining the "third place," a concept concerned with the importance of connection that has long been the cornerstone of the coffee giant's business.
- The company is investing in drive-thru and delivery, as well as new technology - methods that may not necessarily seem to line up with the third place principle in a traditional sense.
- Starbucks plans to adapt its technology and product innovation to better meet customers' needs, as well as test new types of store designs, such as locations that exclusively offer mobile order and pay.
Starbucks is about to enter an era of change, in which the coffee giant reexamines a belief that has been the cornerstone of its success.
On Wednesday, Starbucks announced plans to "reimagine" the third place, a concept that has long been the chain's guiding force.
The third place is a sociology-inspired concept, referring to another place outside the home and work that people can gather and build a sense of community. Long-time CEO Howard Schultz used the concept as a cornerstone in the creation of Starbucks' image of a coffee chain where people are willing to pay a bit more for coffee because of the cache and potential connection that comes with the purchase.
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Starbucks is increasingly investing in drive-thru and delivery, as well as other technology - methods that may not necessarily seem to jive with the third place principle. On Wednesday, Starbucks announced plans to reimagine the concept, focusing on convenience, comfort, and connection.
The reimagining will have concrete results. Certain locations will test new types of store designs, such as stores that only offer mobile order and pay. Starbucks also said that the chain plans to adapt its technology and product innovation to better meet customers' needs.
The modernization of the customer experience will begin its rollout in New York City this summer.
"Our relationship with our customers starts the moment they think of Starbucks," Rox Brewer, Starbucks' Americas group president and chief operating officer, said in a statement. "They connect with us through their barista and the quality of what's in the cup they take with them."
"Their third place is everywhere they're holding our cup," Brewer continued. "No matter their journey, after leaving our stores, that feeling of comfort stays with them. And In an increasingly busy and on-demand world, it's that feeling that keeps the third place growing."
On Wednesday, Starbucks also announced it is investing $100 million in Valor Siren Ventures, a new fund focused on food and retail startups. In the coming months, the fund, which is managed by private equity investment firm Valor Equity Partners, will seek to raise $300 million more from other strategic partners and investors.