The coffee houses of the seventeenth century were places to discuss politics, trade, and business. In England, coffee houses were referred to as Penny Universities. One penny was the price of admission to a place where people from all social classes could join in discussions and get a bit of enlightenment and education. For many years, Lloyd’s of London operated out of a coffee house. It was a place where insurers of ships could hang around sea captains and mates. They’d listen to the seafarers’ gossip and use what they learned to distribute risk and become more profitable.
7 reasons Why Starbucks Can Never Be a Third Place
Two teachers and a writer partnered in a Seattle, Washington retail store that sold coffee beans, tea, and spices from around the world. The founders were going to call it Cargo House until someone talked them out of it. They chose the name Starbucks to, in their words, “evoke the romance of the high seas and the seafaring tradition of early coffee traders.”
Who is the character in the original Starbucks logo?
Did you know she was one of the mermaids who lured sailors to their deaths with their siren songs? You know, half woman and half fish, like Daryl Hannah in Splash.
Starbucks is a character from literature, too
He was First Mate on the good ship Pequod. Starbucks thought Ahab’s quest was such madness that he considered killing the captain, but that would have ruined Melville’s big finish.
Along came Howard Schultz
He sold copiers, kitchenware, and filters for commercial coffee machines before joining Starbucks. He turned Starbucks into a coffeehouse like the ones he had seen in Italy. Positioning his stores as neighborhood gathering centers, Schultz the marketer tried to define Starbucks as the cozy third place in people’s lives. Academia.edu had this to say: “Starbucks has become a cultural icon for all the rapacious excesses, predatory intentions, and cultural homogenization that social critics attribute to globalization.”
Ray Oldenburg said “Starbucks is a pseudo third place that pretends to be a community center”
He’s highly qualified to judge, because defined the concept of third place, so he should know best what’s an authentic third place and what’s just pretending.
Most people do not know what a third place is
Those who do know it as a Starbucks thing, a cafe where people used to come for coffee and stay for conversation. Now they think Starbucks is a cafe where people wait in long lines in their SUVs to pick up expensive coffees and sweet slushes or stand in line inside, plugged into their handsets, not talking with anyone.
How much does your favorite Starbucks store resemble a true third place?
Few know that the real third places described and labeled by Oldenburg have several crucial defining characteristics. The lack of any one of these means it’s not a real third place.
- Is the main activity informal discussions where everyone is expected to contribute? Oldenburg stressed the importance of informal public gathering places. He believed they were a significant part of civic engagement, a functioning civil society, and democracy itself. He believed these gathering places were crucial for fostering community and civility, too. He said third places are also citizen places, locations where people go to connect with their communities, exchange ideas, build relationships, and enjoy themselves in friendly surroundings.
- Is it a forum where people learn to behave courteously, listen to what others have to say, think before they speak, and disagree respectfully?
- Does it foster neighborhood unity and promote democracy?
- Is it a social space where neighbors congregate? How many of your neighbors do you see when you go to your favorite Starbucks? Do you congregate with them? Many of the cars in line at Starbucks are driven by lone commuters on their way to somewhere else, not people from the neighborhood.
- Do people have a sense of belonging to something larger than themselves?
- Do people from all walks of life feel comfortable there? It’s no Penny University because $7 coffee doesn’t draw people from all walks of life.
- Is the main activity good-natured conversation? For most Starbuckaroos it’s waiting in line at the drive-thru or standing in line inside. At least for now, there is no driver-to-driver contact. Headphones on doesn’t foster discussion. Headphones say stay away, leave me alone.
Oldenburg believed third places are crucial to the well-being of individuals and communities
He said they are essential to civic engagement, informal social control, grassroots democracy, the development of cohesion, and a sense of community. He believed that neighborhood hangouts are essential breeding grounds for social connections, community vitality, and for fostering the feeling that we are small part of something larger that has meaning and purpose in our lives. Oldenburg said they’re also citizen places, locations where people go to connect with their communities by having informal conversations, exchanging ideas, building relationships, and enjoying themselves in friendly surroundings
Driven in part by the pandemic, Starbucks next strategy was to abandon the notion of a third place by getting people out of the stores and into drive-thru and mobile orders.
Customers began to mourn how far Starbucks wandered from its original concept. What was once a sit-down coffee shop where people hung out with their laptops was long gone. Starbucks got rid of most of the personal touches that loyal customers came for. They took away the tables and replaced comfortable chairs with metal stools. Electric outlets were removed, leaving customers unable to charge their devices. Starbucks even removed the customer toilets. The purpose behind all these moves was to discourage people from sticking around. You know, like they would in an authentic third place.
Be careful what you wish for
More than three of every four customers orders from the mobile app or the drive-thru. In part, they were driven there by Starbucks strategy of discouraging customers from hanging around any longer than it took to pay and get out.
Visions go by the board when companies chase shareholder value
Starbucks invested heavily in more automation requiring fewer workers and lower payrolls. Thousands of baristas lost their jobs. Two years later, Brian Niccol came over from Chipotle after working for Pizza Hut and Taco Bell. He ditched his predecessor’s automation goals, promising to recreate Starbucks as a third place.
The new CEO says they’re re-imagining and evolving the Starbucks experience
That’s not re-imagining. That’s retreating to the original strategy that was replaced by people who gutted the third place concept in favor of getting customers to grab and go and stop hanging around. And now the company wants to call itself a third place again.
Niccol says the company is “refocusing on what has always set Starbucks apart — a welcoming coffeehouse where people gather
Our stores will be inviting places to linger, with comfortable seating, thoughtful design, and a clear distinction between ‘to-go’ and ‘for here’ service.” This includes the return of customer-only toilets.
Some of Niccol’s plans
Curbside-pickup, take-out-only stores, delivery-only-stores, drive-thru-only stores, closing hundreds of their cafes and replacing them with the new versions as the chain becomes more like a fast food outlet than anyone’s idea of a third place. So much for the welcoming coffeehouse where people gather for conversation.
Harvard Business Review published an article titled How Starbucks Devalued Its Own Brand
The authors say the goal of maximizing shareholder value has resulted the unintended consequence of alienating long-time customers who remember Howard Schultz’s initial concept.
These days, three out of four Starbucks orders are for cold drinks
Because stores were built and configured to serve hot beverages, employees can’t make and serve cold beverages quickly. Delays are also caused by the popularity of ever-more-complicated drink orders. The result is that the lines of people waiting for their drinks get longer inside and outside, too. Long waits in long lines of cars for the drive-thru are not likely to give customers a sense of community, warmth, connection, or belonging.
Niccol says he wants to recapture those thrilling days of yesteryear* when the place was really cozy and people talked to each other
Back then, not everyone was walking around with things in and on their ears, staring at their handheld gadgets, signs that tell anyone with a ounce of sense that this person doesn’t want to be disturbed, much less engage in conversation.
After visiting one of the Starbucks stores, Brian Niccol had a sudden flash of brilliance
He was so deeply touched by what some barista scribbled on his cup that he declared henceforth all employees will draw or write something personal on each customer’s cup because it will give the place a more authentic third place vibe and make customers feel special again.
How did that go?
Everyone fell in line behind Niccol’s personal thrill, more mechanically than emotionally. No one bothered to give much thought to guidelines, so baristas were exercising their self-expressive sides and their artistic flair with words, phrases, notes, and sketches. Sure enough, the complaints started coming in from customers and all of a sudden they need some new rules.
People who make policy decisions are rarely those with hands-on experience
What Niccol envisioned as a personal touch added another step to the already overburdened and handicapped assembly line. There was also some backlash from baristas who enjoyed drawing on cups until it was made mandatory. In their eyes, this was shallow and impersonal. Many customers feel the same way about this insincere gesture.
Overcoming the new obstacle
The real personal touch was the workaround you’d expect from any intelligent barista faced with scratching Happy Anniversary, Ward and June Cleaver on a cup. Some went to mass production and built an inventory of pre-personalized cups when they weren’t busy so that when they were busy, they could pull the next pre-personalized cup and isn’t that just the way a faux third place would do things?
Anyway, it wasn’t long before some baristas showed initiative, improved efficiency, and streamlined an operation
Starbucks is about consumption, not community. The main activity is getting people in and out more quickly. It’s an assembly line mentality and the new boss just threw a monkey wrench into the works. Thanks a lot, Brian.
The extra work meant slower production times, less revenue, and a failed attempt at personalization
Starbucks baristas serve as many as 100 people an hour. Critics argue that the focus on personalization should not come at the expense of efficiency and convenience. If the movement had been better organized, Starbucks wouldn’t have served customers ink-smeared (non-) personalized cups because no one had given any thought to ink drying times, especially when sealed off from the air by each cup nesting snugly against the next.
How are things working out so far?
For the first time ever, Starbucks sales have declined for five consecutive quarters. The Economist says operating expenses are up 12% and net profit dropped 50% because of Niccol’s changes. On the other hand, Starbucks has given CEO Brian Niccol either $96 million or $130 million, choose your source. Either figure is a great deal more than Satya Nadella’s $79 million (Microsoft) and Tim Cook’s $75 million (Apple).
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* Apologies to the Lone Ranger.
Bonus: What about the “third places” some companies provide?
Corporate amenities such as employee-only coffee shops look like places to relax and enjoy oneself, but that’s not the real reason for having them. Coffee and comfortable furniture are there to get more productivity out of workers. When people who work together hang out in the company cafe, the talk always gets around to work issues because that’s what they have in common. Far from altruism, company cafes benefit the company far more than the employees. Always take a closer look when you hear that altruism is behind a corporate business decision.
I listened to Starbucks Jazz Piano Music Collection, “Six Hours of Music for Working, Studying, Relaxing, and Sleeping.” I couldn’t find a playlist for the “Starbucks Frustrated With Long Lines and Long Waits Music Collection,” though.
For more about third places, check out David’s article The Great Good Place.
