Loyalty Is a Two-Way Street at Starbucks

What defines loyalty in the customer-brand relationship? Until this week, Starbucks defined it as the number of times the customer bought a cup of coffee; buy 12 cups and you get one for free. The retailer has now re-defined loyalty as the amount of money spent. This has caused upset among some of its “loyal” customers, who now must purchase 32 cups of coffee to get that free cup. Starbucks apparently was inspired by certain airlines — Delta and United — that now award loyalty points based on the amount of dollars spent, and not on the number of miles traveled. This might telegraph as: We want your money but we don’t want you.

The Starbucks switch was at least partly motivated by profits; obviously it is more profitable to motivate its most profitable customers. However, it also suggests a change in culture. As reported in The New York Times, the Starbucks loyalty program previously was premised on a warmer, fuzzier idea, as articulated by a Starbucks marketing manager in a 2012 blog post: “At Starbucks, our rewards program comes from a different philosophy. At its simplest, we like seeing you, regardless of whether your purchase is a short-brewed coffee or four Venti White Chocolate Mochas. My Starbucks Rewards is designed to show our appreciation simply for stopping by.”

This would be consistent with the way Starbucks famously welcomes everyone to hang out as long as they like at their stores, even if they buy nothing at all. Sadly, such “customers” are the poor cousins of those who gamed the Starbucks loyalty program by asking cashiers to ring up each item separately to artificially inflate their number of visits. This subterfuge also caused lines to slow, making the Starbucks experience worse for everyone else.

The Starbucks-customer relationship in total calls into question the very meaning of “loyalty,” and whether it even exists in a commercial context. As the Times article notes: “Starbucks fell into a trap that is common with loyalty programs: establishing not just an exchange relationship with its customers based on mutual benefit, but a communal relationship based on mutual caring and support … If customers are going to take a ‘hey, it’s just business’ approach to their relationship with Starbucks, they should expect the company to do the same — and it has.”

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Starbucks Gallery & Café Features New Artists

The Art Newspaper: “Starbucks has started selling art from a new coffee bar in Chelsea … with an exhibition of paintings and drawings by the young US artist Robert Otto Epstein, each of which was on sale for between $1,000 and $3,000 … A spokeswoman for Starbucks described the initiative as a ‘pilot programme’ and declined to give any more details on whether the company plans to expand its sales of art. She added that the company will commission ’emerging artists to make site-specific works—mostly murals—or to help us build a catalogue of works for customers to enjoy and discover through display in our cafes around the world.'”

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Ikea Reinvents Its Dining Experience

The Washington Post: “While for decades it has been part of the Ikea experience to get your new couch with a side of Swedish meatballs, Ikea’s U.S. president Lars Petersson said in a recent interview that ‘Ikea food is becoming a core business’ for the privately-held, Sweden-based company.”

“That’s why all 41 of its stateside stores are getting restaurant makeover in the next several months … the goal is to create three zones for different types of diners. One area will be outfitted with high tables and barstools suited for scarfing down a quick bite. A second will aim to be family-friendly, with activities for kids and tables for their parents to dine nearby. The third area they call ‘Fika,’ which is a Swedish word for a coffee break that involves socializing.”

“It makes sense that Ikea is investing in its food business at this particular moment: In 2015, the Commerce Department reported that restaurants saw 8.1 percent sales growth, even as the broader retail industry saw an increase of just 2.1 percent and as home furnishings stores posted a 5.8 percent increase. There’s clearly momentum in the dining category, and perhaps a fresher look and menu can help Ikea get a piece of that.”

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Kola House: Pepsi Generates a New Experience

“Known for its beverages, Pepsi is now moving into the restaurant business,” The New York Times reports. “The 5,000-square-foot space — on the same block as Milk Studios in Chelsea … will become Kola House, a restaurant-bar-event space that the company hopes will be both social hub and testing ground for new products.”

Kola House “will not be plastered with the Pepsi logo or filled with Pepsi products. Everything at Kola House will be centered on the kola nut, a bitter fruit that contains caffeine and gives cola beverages their name. Essentially, Pepsi is trying to market its product without marketing its product.”

Pepsi design chief Mauro Porcini: “Consumers will love your brand because your brand enables you to have the experience, but they don’t want to have the brand in their face. It needs to be very subtle, elegant, sophisticated.”

Pepsi marketing chief Seth Kaufman: “We are in a time where we have to transform how we connect with and engage consumers. If brands don’t do that today, they will be irrelevant tomorrow, whatever tomorrow is.”

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GE: Perfect Homemade Pizza For Just $10,000

Business Wire: “Perfectly crisp crust. Browned, bubbling mozzarella. GE’s Monogram Pizza Oven brings restaurant-quality cooking capabilities to the home kitchen, enabling home chefs, entertainers, families and pizza enthusiasts to recreate their favorite pies—from the perfect Neapolitan to New York style and everything in between—quickly and with ease … the Monogram Pizza Oven brings authentic old world taste to today’s high-end kitchens.”

“The Monogram Pizza Oven was developed through FirstBuild, a new model of manufacturing that challenges makers around the world to ideate and help design innovations in home appliances … The Monogram Pizza Oven is available May 2016, with an MSRP of $9,900.”

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He Ain’t Heavy, He’s My Waiter

The Wall Street Journal: “In a new study … researchers wanted to find out whether a restaurant server’s body-mass index … influenced what diners chose to consume. Trained students working on the research team observed 497 interactions among diners and servers in 60 casual American full-service restaurants, such as Applebee’s. In each case, the observers estimated whether the server and the diners had a BMI of more or less than 25, the standard cutoff for being overweight. The result: ‘If you have a heavy server … you order more’.”

“What accounts for this finding? The scientists can only speculate” but suggest that “diners with a heavier server felt freer to order more fattening items.”

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Don’t Let Them Eat Cake

Some restaurants now charge a “cakeage” fee to patrons who bring their own celebratory cake, reports The New York Times. At some restaurants the fee is as much as $14 per person. Some patrons are outraged, but so are some of the chefs, who think that bringing a supermarket cake into their restaurants is an “abomination.”

At WD-50 in New York, the pastry chef “didn’t want anyone in the dining room to see it and think it was coming out of his kitchen.” At Miller Union in Atlanta, owner Neal McCarthy complains: “These people sought out a nice restaurant, yet they undermine it by bringing in the world’s most hideous cakes.”

However, Vinny Accardi of Room 55 in Queens, New York takes a more accommodating view: “It’s a restaurant and it’s the hospitality industry,” he says. “The whole goal is to make people have a good time.”

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Like Amazon for Your Diet

“Research increasingly suggests that each of us is unique in the way we absorb and metabolize nutrients,” reports The New York Times. “This dawning realization has scientists and entrepreneurs scrambling to provide more effective nutritional advice based on such distinguishing factors as genetic makeup, gut bacteria, body type and chemical exposures.”

Dr. Eran Elinav of the Weizmann Institute of Science in Israel “found a startling variation in the glucose responses of 800 subjects fed the same foods … By combining data gleaned from subjects’ glucose responses with information about their gut bacteria, medications, family histories and lifestyles, the scientists devised an algorithm that accurately predicted blood sugar responses to foods the participants hadn’t yet eaten in the study.”

“The algorithm is similar to what Amazon uses to tell you which books you want to read,” says Eran Segal, also of Weizmann and a co-author of the study. “We just do it with food.”

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App-etite for Munchery

Bloomberg Business: “Munchery is one of dozens of technology startups around the world trying to solve the challenge of mealtime planning with the tap of an app. GrubHub in the U.S., Just Eat in Europe, and Ele.me in China, to name just a few, all connect Internet users with restaurants and their takeout menus. Critics derisively call the proliferation of these businesses the “lazy food economy,” but Munchery is different. It cooks and delivers its own relatively healthy fare.”

“The company is in four cities—San Francisco, Los Angeles, New York, and Seattle—operating industrial kitchens in each. One recent afternoon in San Francisco, chefs and their assistants, wearing white caps and long-sleeved smocks, toiled over trays of grilled salmon atop brown rice with edamame and sweet carrots ($10.99) and pork belly buns with hoisin sauce, shredded cabbage, and pickled daikon ($10.95) … After they’re prepared, the dishes are chilled in refrigerated rooms, packed in compostable boxes, and loaded into cars for delivery. Customers heat them up for about two minutes in a microwave or 10 to 20 in an oven.”

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Americans Are Loving Bowls

“Sales of bowls are rising as Americans prefer more casual, one-course meals that layer flavors,” The Wall Street Journal reports. Tableware makers are reconfiguring place settings. Restaurants are overhauling their china cabinets. Consumers are increasingly cradling their food while perched at kitchen islands, lounging on sofas or multi-tasking at a table.”

“The trend began as a way to make healthy entrees more appealing. If eggs and vegetables are piled into a bowl rather than on a plate, the diner is less likely to mourn the missing bread.” Juliet Boghossian of Foodology comments: “You’re taking away all the carbs, like toast, muffins and potatoes, but you don’t see the empty space on the plate.” Designer Ree Drummond adds: “A bowl is much more flexible and open to interpretation compared to a plate.”

Rebecca Proctor of Aurora Brands says: “The rise of the bowl is really evidence of the shift in our lifestyle from more formal to casual.”

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