The Keyhole makes observations about consumers, brands, ads, & marketing, through a predictive customer loyalty lens. Most marketing is ineffective to today's bionic consumer, given undifferentiated products, loss of "brandness," & hard to come by profits. Marketers talk about "engagement" but nobody seems to be doing a very good job measuring or integrating it into what they do & it shows! The Keyhole opens a dialogue on this subject & suggests real-world solutions with the marketing community.
Tuesday, July 31, 2012
Coffee Cools Down. Especially at Starbucks.
With the weather being some of the hottest in decades, one
might think that iced coffee sales would be going through the roof. But if
Howard Schultz, founder and CEO of Starbucks, seemed a bit jittery, it wasn’t from
too much caffeine. Analysts’ confidence were apparently on the decline when the
company posted what they felt were disappointing earning results. And the share
price fell nearly $5 at close of trading Friday.
Starbucks has not been climbing on our Customer Loyalty
Engagement Index either. Current overall rankings look like this, with
Starbucks moving down a little in terms of customer engagement, and McDonald’s
moving up a little:
Customer expectations almost never go down, and that’s even
truer in the out-of-home coffee category, where the increase in the number of
specialty providers attests to that. Oh, and an increase in the number of
varieties on offer, all appealing to coffee aficionados’ palates and a renewed
desire for novelty – including iced espressos, chocolate cappuccinos,
Japanese-style iced coffees – brewed hot and an alternative to cold-brewed iced
coffee – Stumptown’s famous “Bernice,” and New Orleans-style chicory flavored
café au laits. So it wasn’t surprising to find that the biggest expectation
jump – nearly 25% – was in the Innovation/Variety/Specialty category engagement
And if you look at the brands in terms of how they are seen
as innovators (whoever thought the day would come when brands like these would
have to innovate beyond serving up a decent cup of joe!?), the rankings stay
pretty much the same, but the innovation/variety/specialty numbers tell the
Dunkin’ Dounts 91%
Tim Hortons 79%
It’s been said that behind every successful man or woman is
a substantial amount of coffee (variety notwithstanding). But over the
24-hour-period from last Thursday afternoon to Friday afternoon Mr. Schultz’s
stake in the world’s largest coffee purveyor evaporated by $151 million
even at Starbucks' prices, that's an awful lot of coffee.