Putting the ‘Bar’ in Barista: Pricey Lattes, Capuccinos and Macchiatos … With a Beer Chaser?

With a serving concept originally generated about four years ago, and then intensively beta-tested, Starbucks has begun rolling out its new drink and munchies menu, serving beer, wine and its version of bar food to thousands of locations. The new wrinkle, called “Starbucks Evenings,” has been thoroughly designed and cascaded into key markets; and alcoholic beverages will be served only in locations where demand is expected to be—high.

With a serving concept originally generated about four years ago, and then intensively beta-tested, Starbucks has begun rolling out its new drink and munchies menu, serving beer, wine and its version of bar food to thousands of locations. The new wrinkle, called “Starbucks Evenings,” has been thoroughly designed and cascaded into key markets; and alcoholic beverages will be served only in locations where demand is expected to be—high.

Starbucks has reached 40, a mature middle age; and the chain has been actively seeking to rebuild and evolve its brand, and make its locations more a part of the neighborhood. The chain has tried “line extensions” in the past (Starbucks ice cream was a total disaster), but Starbucks Evenings is serious and strategic. The updated stores will have new, more muted colors in their interior design that are definitely a departure from what customers have come to expect—at a refurbishment cost that begins at $25,000 and can reach six figures. From many perspectives, this is a huge gamble for the worldwide chain.

Everyone understands the potential negatives: a compromising of Starbucks’ high-end coffee house image, and the business downside this can bring. Baristas need to be trained in how to sell alcoholic beverages, and may also need to be trained in how to deal with “overserved” customers. Finally, the company has to address how to accommodate the minors who frequent their locations in large numbers. After all, drinking coffee and tea is legal irrespective of age; and there may be challenges in setting up spaces for underage customers, for those adults who don’t want to be around alcohol, and for those customers who are only in Starbucks for beer and wine. Starbucks is convinced that won’t happen, in part because other chains—Chipotle Mexican Grill and Red Robin Gourmet Burgers (though a family restaurant, it’s offering dessert/alcohol combinations, such as a Mango Moscato Wine Shake)—have been doing this for some time.

On the (calculated) plus side, the company’s approach represents an opportunity to attract customers who would like to have an alcoholic beverage in a safe, calm and pleasant atmosphere and who will pay a premium for the privilege. Some of these may be new customers, who could return during the day to enjoy Starbucks’ traditional food and beverage fare. Also, the evening food and drink menu will be served at locations near public transportation, generating high levels of foot traffic.

At the end of the day (pardon the pun), it’s all about the customer experience. Starbucks believes selling alcoholic beverages is a natural progression for the company. As stated by its spokespeople, Starbucks is all about occasions for customers to gather, relax and interact with one another. And this is particularly true in the evenings, after work and after dinner, which is usually the busiest time for coffee shops and bars.

Most observers and analysts think Starbucks will succeed. As one local daytime patron, who has now included evenings in his Starbucks visits, noted: “It’s not just the wine, it’s the unwind. The atmosphere here is all part of the experience.”

A tip of the hat, a tip of the cup and a tip of the glass to Starbucks.

Search Marketing Reaches for New Heights

It’s no secret the economy is forcing online retailers to change the tactics they use to acquire and retain customers. But this doesn’t mean they’re cutting back across the board. While they’re cutting spend in some areas, they’re spending more in other areas that bring positive ROI.

It’s no secret the economy is forcing online retailers to change the tactics they use to acquire and retain customers. But this doesn’t mean they’re cutting back across the board. While they’re cutting spend in some areas, they’re spending more in other areas that bring positive ROI.

This may be why more than 80 percent of the 24 percent of retailers, who indicated in a recent Forrester Research survey conducted for Shop.org that they’ll spend more than originally planned this year, said they planned to increase their search spend.

The results of the survey of 117 online retailers were compiled in Shop.org’s study, The State of Retailing Online 2009.

The study reminded me of a case study I heard about recently involving Cabela’s, the direct marketer and specialty retailer of outdoor sporting goods. The company used a paid search campaign designed to push traffic into retail stores during a Memorial Day sales event last year.

Cabela’s maintains a strong online and catalog presence in addition to a growing number of retail stores across the U.S. “To increase traffic at these brick-and-mortar locations,” says Derek Fortna, Internet marketing manager at Cabela’s, “we decided to promote our offline stores online.”

For the campaign, Cabela’s partner, Performics, built paid search campaigns for each store, focusing on keywords for Cabela’s brand, the Memorial Day event and the combination of both, such as “Cabela’s Holiday Event.”

Geotargeted strategies were used. The company developed ad copy offering in-store coupons. These appeared on search pages of people who were in a 200-mile radius during the holiday event, and could only be redeemed at those locations. Landing pages were also developed to guide consumers through the coupon retrieval process.

The results? Ten percent of all consumers who clicked on the ad retrieved coupons, and 40 percent of the coupons were redeemed at retail locations.

This is one of the best success stories I’ve heard involving geotargeting, retailing and online search, and certainly one worth going to school on.