Archive for the ‘experience at retail’ Category

Dunkin’ Donuts knows who they are and who they want to attract

I know I’ve posted a few times about Starbuck’s - the experiential case study in the coffee biz.  However, in an effort to show unbiased attention to the other guys I applaud Dunkin’ Donuts effort to position themselves in a unique and competitively attractive way to the other guys in Seattle.

A recent post from the Hub, interviewed several brand marketers about creating great retail experiences.  One of the panel members was Frances Allen from Dunkin’ Donuts.  A great piece.  What particularly caught my attention was when they addressed the subject of consumer segmentation.  Frances took that question and went on to explain their consumer positioning and consumer target.

How critical is customer segmentation to retail success?

Allen: It’s knowing who you are that is number one. So, we understand completely who Dunkin’ Donuts is and who finds Dunkin’ Donuts appealing. You’ve got to understand the products they want, that fit in with their needs, the service that’s appropriate for them and a value equation that they can feel good about.

It’s certainly not about demographics in our case. When you go to a Dunkin’, you see a construction worker standing behind a nurse standing behind a woman in a power suit. Dunkin’ Donuts has a unique appeal to people who have busy lives. They are working people with places to go.

What Dunkin’ customers want is quick quality. They want to come in and know what they’re going to get. They are not looking to sit around on sofas and chat and have meetings. They have worked a hard day’s wage and want a real down-to-earth quality product at a fair price. That crosses all demographics.

An epiphany moment for me!  You see, I frequent several coffee establishments but wasn’t sure why I went to one over the other.  It now all made sense.  Often the best positioning is the least obvious, but resonates on some deeper emotional and often unconscious level.  As I thought about the times I appreciate Dunkin’ the best, it was when I was in a hurry, stressed, and just needed a great consistent cup of coffee - on the go.  Contrast that with Starbuck’s, where I would go to meet someone, relax, and take it all in - maybe on a couch - or minimally at a much leisurely pace.

This positioning integrates very well with their previous Rachel Ray “On the Go” campaign as well as their new “Keep it Simple” campaign.  It now all makes sense.  I love being an enlightened consumer!

You dance with who brought you - Starbucks getting back to coffee basics.

A recent AP story out of Seattle ran in the business section titled “Starbucks brewing up plan to bring back the romance”.  I’ve always said good marketing strives to build  long term relationships not a lustful few dates.  At the center of those relationship lies consumer passion.  Over the last few years it seems that Starbucks thought its girl was becoming less attractive as competition grew.  Maybe a face lift, more make-up, a new opening line.  All superficial changes that may have proven unnecessary and not really desired by consumers. 

Numbers always looked good because of rapid expansion of new stores.  But a scratch beneath surface showed that its stock has slid more than 50% since 2006 and its most recent quarterly profits rose by a mere 2%.  Heads have rolled with the firing of CEO Jim Donald putting Howard Schultz firmly back in the driver’s seat.  Blame it on greedy revenue growth tactics, conflicting consumer messages or poor leadership Starbuck’s is taking time out to look backward and re-instill the core brand values and consumer experiences the brand was originally built upon .

As I see it, here’s what apparently isn’t working:·        

Stores have gotten cluttered with all sorts of trinkets, teddy bears, coffee machines, and holiday stuff that are taking up space that could provide another table or two for loyal Starbucks fans to extend their experience by sitting and enjoying the product with a friend.  Sandwiches while may have boosted store revenue by about $35,000 annually are average at best and not what most consumers go to Starbucks for in the first place.     

The stores need to smell and sound like fresh coffee being made.  Any effort to hide this sensory experience by blocking the view of the barista, covering up smells with Gorgonzola cheese, or playing music louder than necessary is covering up the ethos of the coffee experience.  Go back to making it the old fashioned way instead of using automatic espresso machines and flavor locked packaging.  Think of Cinnabon and Mrs. Fields’ cookie shops.  Where would they be without the aroma, ovens, and apron-ed cooks?

The specialty coffee market is approaching 13 billion dollars a year.  Here’s the amazing fact – 90% of that is in single cup sales.  So why is Starbuck’s taking up so much room with bags of coffee beans and coffee makers?  Maybe just to support its own internal contest to give away i-pods to the employees at the two stores selling the most pounds of coffee.  A sales incentive that only rewards two stores out of almost 2000?

A test to offer $1 cups of coffee.  For a brand that’s worked hard to get it’s average purchase price over $3, why would you want to discount the price often resulting in discounting equity.  I’m always amazed when strong brands begin heading t=don this slippery slope.  I admire brands like Under Armour that never marks down the price of its quality  products.  Because of this, people position it much higher in their minds than it’s competitive knock-off clothing lines because of this.

Give the brand back to the passionate consumers.  To quote Howard Schultz, “We are not just selling coffee…we are selling a coffee drinking experience”.  Anything that detracts from that pure and simple premise is diluting the brand experience and making it less appealing to its loyal consumer base.  Don’t be so concerned with the McDonald’s and Dunkin Donuts of the world.  They are ones trying to morph their brands into coffee shops from hamburger and donut shops.  Be authentic and true to your vision and consumers will reward you with passion and loyalty.

A Great Little Restaurant Experience

Some of you may be able to relate to keeping children sufficiently occupied while the parents try and enjoy a dinner out.  The usual time occupiers we all like to bring along have been electronic engagement devices such as Game Boys, PS2s etc..  But let me relate a story of one restaurant that has a creative way of keeping our kids occupied in a very brand centric fashion.  The restaurant is Carrabba’s Grill.  A moderately upscale Italian place that is one of the brands within the Outback Steakhouse family of restaurants. 

Most of us with kids (mine are now 14 and 11) are familiar with the standard offering by the hostess of the bag of slightly chewed and very used crayons and cheap coloring books.  Perhaps that bag of goodies occupied Ozzie and Harriet’s brood, but today’s over-amped, multi-tasking kids in search of constant stimulation look at this “kiddie bag” as nothing more than cheap antiques made for throwing at unsuspecting siblings.  Carrabba’s offers a much different experience for families with children of any age.

Once seated and the drink orders are established, a hostess will arrive with a fresh basket of baked bread and a small ball of fresh dough for each child.  This unique offer creates endless hours of entertainment for kids of all ages as they roll, poke, and shape their creation.  As a marketer I view this tactic as supporting the Carrabba’s brand core essence of home cooking and the tactile and sensory nature of an Italian kitchen.  This Play-Doh like experience doesn’t end with just the creation of gingerbread men, baguettes, or other less desirable objects.  When the meal arrives, the waitress retrieves the freshly shaped dough and returns it to an awaiting oven.  By the way, I believe they smear it with a wonderful garlic butter sauce prior to baking.  And in just a few minutes the kids’s baked goods are presented back to them ready for their immediate consumption and enjoyment.

A wonderfully creative (yet brilliant in its simplicity) alternative to crayons and coloring books that supports the brand and ultimately helps create a unique experience for the entire family.  I would encourage more restaurants to get creative with their dining experience.  Clearly, really appealing and tasty dishes help.  But it’s not just about the menu or the atmosphere.  That can often be superficial window dressing that may attract people once.  Great restaurants create a total dining experience where the food is only one element of the evening’s gastronomic theater. 

How many of us return to restaurants that have average food simply because we have a good time, converse with friends or family, and ultimately end up telling others to try out ”our new spot”?   And as I like to say, when people talk…people buy.  A great experience can trump average food.  Whereas a mediocre experience will stick out in your mind more than a really good dish.  And if you want to see your kids leave hundereds of dollars of gaming devices in the car for pennies worth of bread dough check out a Carrabba’s Grill.