January 7th, 2010
01:52 AM GMT
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It takes years of brilliant business strategy to build a global brand. And love it or hate it, Starbucks is one of the most recognizable coffee products around. So why would the Seattle-based behemoth want to un-brand its powerhouse name, logo and taste?

That's exactly what it's trying, in what some call a brazen attempt at "stealth retail," when a corporate giant tries to sneak a sip of home grown neighborhood familiarity with the consumer never knowing the difference. A Seattle outlet of the Starbucks chain has been rebranded as15th Avenue Coffee and Tea. And there's nothing Café Misto about it. Most certainly, your java and milk in this corner café will be called, quite simply, Café au Lait, as the rest of the un-Starbucked world knows it.

Starbucks sent out its own sleuths to study local coffee shops observing everything from the décor, to the music, to the cups. The company already has opened two of its uniquely named remodeled coffeehouses in Seattle as an experiment that could be extended to more of its 16,000 stores.

Seattle bloggers are frothing at their Frappuccinos over the news. Just a quick sampling below will give you a sense of the local flavor:

"In desperation, Starbuck's is now throwing Hail Mary passes. It's likely going to backfire in a big way."

"Starbucks can do whatever they want to do with their business. If you don't like their stores, go somewhere else, but stop whining!"

"What's wrong with taking fashion tips from the most fashionable girl in school?"

"I hate Starbucks. OMG the most pathetic people go there."

Well, what can you say? In a retail age in which growing numbers of consumers want to know exactly where their carrots come from, what philanthropic causes a CEO supports, and whether child labor was used to pick the cocoa beans in their favorite snack, "stealth retail" could become a lightning rod.

Take the UK's "Innocent" story. A completely non-corporate maker of smoothies and juices recently sold a stake to Coca-Cola, of all companies, for a reportedly sweet-and-substantial 30 million pounds. "Innocent" built its brand as eco-friendly, sporting cute cow-like vans and is just one in a lineup of local success stories to sell to a corporate fat cat. "Innocent" wanted to raise funds to expand in Europe, and of course growing the brand often means giving away the hand. It's business, isn't it?

While different from "stealth retail," the "Innocent's" loss of innocence is another example of how wary consumers need to scratch more than just the surface.

Consumers who are conscious about what they buy can become confused, even outraged when they discover they're not getting quite the thing they thought they were. Or that after years of patronage, a trusted company changes direction, and nobody bothered to let the public know. As a conscious consumer, you might be shocked. You might be appalled. People seem to take this stuff rather personally- as if your long haired peacenik husband came home one night with a buzz cut and a rocket propelled grenade launcher on his shoulder. You might run the other way, but even if you just shrug your shoulders and get on with your evening, chances are, you at the very least- notice!

So what will the consumers' verdict be on this kind of stealth, corporate tactic? Is there anything wrong with taking fashion advice from the most fashionable girl in school? What if her outfit turns out to be a fraud? I honestly don't know, but in today's market, the consumer will most certainly decide.

Join me on World Business Today for an examination of "stealth retail" and other trends.

soundoff (23 Responses)
  1. Kurt Peterson

    This Patrick Oppman fellow doesn't strike me as particularly bright. His whole point ostensibly revolves around how Starbuck's is re-branding, yet the CEO's first words are essentially that they aren't re-branding. I also find it incredibly annoying how he does that spastic karate-chopping-the-air-with-both-hands-for-no-reason virtually all the time that his mouth is making sounds. And as if all that weren't enough his voice sounds like a twelve year old with strep throat.

    On an unrelated note I must disagree with the "indie coffee shop" talking head singing the praises of supposedly smaller-therefore-better businesses, and going off about the "local coffee house experience", for I have learned the hard way that recreating the local coffee house experience is as simple as drinking a cup of human diarrea. Almost every local business I have patronised in recent memory has provided vastly inferior goods and services to large scary corporations such as Starbuck's.

    January 7, 2010 at 5:23 am |
  2. Joe

    The whole thing is very sneaky. I try to seek out businesses that are 'Mom & Pop' to try to give local owners a leg-up. I want my money to stay in my community. I hate the idea of going to something that appears to be home grown, only to actually be sending my money to Starbucks. Local coffee shops have continually been the anti-Starbucks with their businesses fuelled by disgust with Starbucks' business practices and global dominance.

    January 7, 2010 at 6:54 am |
  3. Martincasas

    Like the idea of turning "local" with a "global" product. It will make the "global" more "local" and that is good. The ying and the yang will allways bring a better product. Lowkey Star Bucks is what it needs to go back to it´s roots and make the product a real monopoly. Interesting ways of the world of coffee and now tea... All 4 it.

    January 7, 2010 at 7:08 am |
  4. Mike Lee

    No matter how you dress it still is the same company and I live in Seattle go figure.

    I will never never would stop at Starbuck's as long they keep charging for WIFI. I'd rather support the small or other competitors that are willing to provide FREE, FREE WIFI.

    As a matter of fact the city of Spokane, WA its almost free WIFI, however if you are inside any of the Starbuck's anywhere within the city limit they block the Free WIFI provided by the city.....

    January 7, 2010 at 7:18 am |
  5. Roman

    Why always be so pretentious? Why can't "Café au Lait" just be called "Milk Coffee"?

    January 7, 2010 at 7:56 am |
  6. Mitchell

    I hate Starbucks! Their coffee tastes burnt, they charge way too much for it and call the sizes by really stupid names and they waste a lot of water. I live in Europe and would much rather prefer to go to the many cafes that don't have coffee cups the size of Big Gulps. Oh how I don't miss the US!

    January 7, 2010 at 9:26 am |
  7. Lim Boon Chuan

    It is far from unbranding of the Starbucks brand. The strategy is to compete at the home grounds of the would be competitors, hold them up while building Starbucks branding to even greater heights.

    January 8, 2010 at 12:04 am |
  8. Chief Oracle Officer

    Great strategy, It's just business. Don't take it too personal.

    January 8, 2010 at 3:12 pm |
  9. Shannon

    Whatever Starbucks looks like, they will have to get some better coffee and a wider variety to hold up to the locally owned places in the US, at least the ones I know and love. But in Munich, Ger. there's very little else than big business shops like Starbucks. I can't imagine they'll do much changing over here.

    January 11, 2010 at 1:44 pm |
  10. Johnnie

    Mitchell–I like your comment and agree. Starbucks is not for me either. I would rather buy coffee at a gas station

    January 11, 2010 at 5:16 pm |
  11. You Mei

    Anyway it is "STAR BUCKS"!! Although they're trying to unbrand, the primary system and the design in the store are exactly those of Star Bucks and they cannot hide their brand name...
    However now that perhaps many people have lost interest in "usual star bucks", the attepmt to gain new customers should be appreciated in terms of marketing !!

    January 12, 2010 at 1:36 pm |
  12. liliac

    The comfort of FREE WIFI, nice music, reasonable priced coffee, etc.. BUT since I havent been to starbucks for years, I was at awed that you have to pay for internet, not only that, they REQUIRED personal information through their corporate buddy AT&T in order to "sign-up" for a "special" long term internet acces to starbucks bla bla,..... get my point??? I went to dunkin donuts instead....no wonder their closing like crazy!!!

    January 12, 2010 at 4:39 pm |
  13. Rowny J.Vidot

    Coffee is coffee, don't forget, "beauty is in the eyes of the beholder" are you paying for "good" coffee or are you paying just for some fancy brand name ? There are lots of small competitors eating away at Starbucks market share these days, and they are just as good if not even better.

    January 16, 2010 at 6:45 am |
  14. Maria

    Starbuck's new strategy is quite interesting. Not seeing their new shops are unbrand ones, I'm lookingo forward to their result.

    January 17, 2010 at 10:03 am |
  15. Orville Boutilier

    Isn't this the funniest thing. A coffee shop that makes terrible coffee toying with marketing tools that proves how easily led the American consumer is.

    I swear, I've had this product in several places around the world and NEVER did I consider it better than McDonalds coffee, NEVER. It's a terrible product.

    But that's OK, I wish them every success in whatever they set out to do because coffee is not their game. It's playing cat and mouse marketing and they are good at it...seriously. The only other company I can think of that got so large hawking a terrible product is Microsoft.

    January 18, 2010 at 4:39 am |
  16. Yaya Yah

    I don't know..I think it's good that starbucks is trying to blend in to the local environment. With the "if you can't beat them, join them" spirit, they might even think of something that'll be made from the locals point of view.

    January 18, 2010 at 8:36 am |
  17. Kelly

    If the new shop can't make the anti-Starbucks people buy their coffee, then that means that their attempt is failed.

    January 18, 2010 at 12:18 pm |
  18. Sophie

    This is why Starbucks has become so big in such a short period.... They will do any thing to get money!! And they know well the winkles for getting a customer intrested. Aren't you inclined to visit that Starbucks-"inspired" coffee shop? Perhaps we're now caught up in their strategy....

    January 18, 2010 at 4:45 pm |
  19. Hooked

    They look for another way to make themselves outstand amid they're already popular.
    Nature of an innovator isn't it?
    There are many cafe that looks like starbucks, but they're just copycats.
    Well, whether you like the taste of their coffee or not is different thing,though.

    January 19, 2010 at 3:31 am |
  20. Joe Uma

    All the people who would rather buy their coffee from fast-food or gas stations obviously only drink drip.

    Try an espresso based coffee, even an Americano (espresso cut with hot water). The difference is astounding.

    January 19, 2010 at 9:08 am |
  21. Tonja

    Agree with your opinion =)

    June 1, 2010 at 11:45 am |
  22. coffee maker rating

    Its like you learn my mind! You seem to grasp so much about this, such as you wrote the e-book in it or something. I think that you just can do with a few percent to force the message house a little bit, however other than that, this is great blog. A great read. I'll definitely be back.

    August 12, 2012 at 5:03 pm |
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    November 5, 2012 at 5:20 am |

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