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Out There in the Middle
Posted: 6/7/2010 6:30:53 AM
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Check out these words to the James McMurty song, "Out There in the Middle:"
We got tractor pulls and Red Man chew Corporate relo refugees that need love too
we ain't seen Elvis in a year or two
we got justification for wealth and greed~
Amber waves of grain and bathtub speed
We even got Starbucks
what else you need?
(chorus)
Out here in the middle
Where the center's on the right
And the ghost of William Jennings Bryan preaches every night
To save the lonely souls
in the dashboard lights
Wish you were here my love
Wish you were here my love
As usual, McMurty is on to something here. This song probes the tensions and contradictions of the fly over zones in America. But he also pinpoints a key part and largely unrecognized part of the Starbucks growth model before the company's fall in 2008. Now that profits have rebounded somewhat in the last quarter or two, perhaps Starbucks will return this to strategy -- what I call the company's frontier strategy. This is not just about location, but also about symbolic cultural capital.
Beginning in 2004 or so, as Starbucks executives nervously watched the company's hip image fade in the cities, they moved the firm to the hinterlands. On the outer reaches of American consumer culture, the company found places hungry for the experiences and representative aura it has to offer. Take the case of Muskegon, Michigan.
For years this small, moldering city in Western Michigan tried to get its own freestanding Starbucks. When a 1,600-square-foot outlet with a sit-down cafe and drive-through window finally opened in front of the Lake Mall in 2006, a country supervisor gushed, "It's the level of class that they bring that is impressive. "They serve a product that young, urban people want," said the president of the Muskegon Area Chamber of Commerce. "Having them locate in Muskegon is a signal we are a community of the future. Now we just need them to consider coming downtown." But Starbucks has refused. In fact, by locating their frontier stores in strip malls, as they usually do, Starbucks helped to accelerate the collapse of Main Streets everywhere. Yet still many middling communities want the coffee giant to locate in their towns. (Some higher-end towns are though resisting the pull of the Starbucks brand.)
"Starbucks is just a great name, creating such recognition through the branding they have done," said marketing director for the Muskegon mall, adding that she believed that the company had transcended "trendy" and become a symbol of "quality." "Starbucks has passed the point of just being 'hip,"' she explained. "It draws all kinds of people because everyone likes the product. It brings a quality product to our market. There is an appeal to this brand."
In other words, Starbucks has become the most mainstream of mainstream experiences, the McDonalds of the new luxury seeking middle-class. But once happened, how can Starbucks continue to create the kind of experience that the aspirational middle-class seeks to grab and hold on to in order to affirm their individuality, good taste, and middle-class-ness?
What Starbucks did was expand the frontier. It opened in smaller cities in foreign countries, in the capitals of some less-developed spaces -- spaces where it hadn't gone and where it could produce a "buzz" amongst upper-middle-class, status seeking types. On a research trip to Guadalajara, Mexico, I watched as people paid more than an average day's wage in that country to valet park at a Starbucks. Once there, they didn't sit inside -- and it was a nice store -- they sat outside near the curb where they could see and be seen overspending on coffee.
As Starbucks rebounds, look for a return to the "frontier strategy." Clearly, the brand has played itself out in the cultural centers -- that is why it is opening up stealth Starbucks -- prototype stores without the siren logo in Seattle and London. But on the Bobo fringes -- out there in the global middle -- a Starbucks might still mean something to conspicuous consumers. They might greet its opening with more than a yawn. They might pay to valet park and purchase a profit generating venti frappuccinos.
All that is good for Starbucks. Good press and steady profits -- for a while, until the brands plays itself out and the firm needs to seek new frontier. A Starbucks in Reading, PA or Ottomwa, IA. (There are already two Starbucks in Dubuque.) Or maybe a Starbucks in Shenhzen, China or Penang, Malaysia, or Siberia even.
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