NYC Flagship. Reinventing your Third Place: Home, work and Starbucks experience

Temple with more than 2,000 square meters

A new temple for Starbucks lovers opened last December in NYC, in the Chelsea Market area, across Google’s offices in the city. They are more than 2,000 meters distributed over three floors with 5 well differentiated areas including an area for cocktails, Italian pastries and sandwiches (Princi), ice cream and of course, 6 different ways to make a coffee (in addition to the espresso).

• 280 employees strive to realise a differentiated experience for customers who are willing to pay 7 to 10 euros for their coffee. The price does not seem to be an impediment to continuing to grow this company that with sales of 22 billion euros (same Inditex and Mercadona league) and annual growth of 10% is making Starbucks that “third place” desired by its customers after home and work.
• With a local design, copper colour dominates the environment. The central axis of the store is a roasting area that prepares more than 500 tons of coffee to be used in some of the 28,000 outlets that Starbucks has. With a high annual x17 inventory turnover, it is indeed the envy of any other retail business.
• The plan is to have a total of 6 Flagships with similar globally characteristics. They have already also opened in Seattle, Shanghai, Milan, Tokyo and soon in Chicago.

Declination of formats

Few businesses have declined their format in variants as different as they have, from small kiosks implanted in hotels/office blocks to these 2,000-meter theatre stores maintaining a special aroma and atmosphere.

Mhe works for major chains and brands improving retail strategy and operations

Retail Customer Experience Optimisation

Food

Food already accounts for more than 20% of its sales and the alliance, in full execution with Nestlé to distribute its products on supermarket shelves and other distribution channels, will facilitate the transfer of the same experience to theirs home that’s why they will have additional reasons to visit “the third place”.

Strong Competition in China. Luckin Coffee

It is present either directly or through licenses in 80 countries – with varying results – and the strategic points are USA and China. In fact, it is in China where they are encountering a first-timer but strong competing operator: Luckin Coffee. This startup (October 2017) has already opened 2,000 outlets and plans to double them during this year 2019 beating Starbucks in the Chinese market. With -30% lower prices and focused on a queueless service, take away and Home/Office Delivery Luckin Coffee is managing to change habits in their compatriots.

Innovation and size can work together

Innovation and size can work together and Starbucks achieves very high levels in omnichannel, loyalty programs and advanced initiatives in corporate responsibility as support in the secondary and university education of its employees, hiring 22,000 wives of military veterans and a strong commitment to sustainability and the environment. Profit and support local communities live together and feed each other very well.

Beyond the product, beyond the price

Approaching its 50th anniversary, It gets a renewed experience that makes its followers continue to consider it as their third place: Home, Work and … Starbucks. Beyond the product, beyond the price.

More info: carlos.dominguez@mheconsumer.com

www.mheconsumer.com

For some conventional Retail chains, flagship adjective is synonymous with point-of-sale that generates heavy losses. Efforts by some brands like the one Nike makes in this new flagship only have a good reason to be when there is a clear focus on omnichannel and core wholesale activity.

Located on NYC’s Fith Avenue and opened on November 2018 with more than 5,000 square meters of surface and six floors. Originally named as House of Innovation, follows  the track of the first opening of this type of Nike store in the Asian continent, not randomly (Shanghai).

It contains within it different new concepts, some of them already tested individually:

• Nike Speed Shop
• Nike Sneaker Bar
• Nike Expert Studio

Nike, with a growth of +10% annual sales (with only +1% stock) and consolidating margins, materialises in this new flagship store its three principles:

+ Innovation
+ Speed to market
+ DIRECT to client

Direct to client
“DIRECT” sales to customer already account for 1/3 of Nike’s total including own retail and ecommerce, the latter with year-on-year growth of 25%.

Platforms vs individual products
They are not based on merely releasing new individual products to market. Otherwise they make use of already proven platforms (e.g. Air Max) as a growth vehicle through new models designed much faster than the past.

Innovation
Strong support and development of its app and omnichannel with new features such as:

• Click & Collect internal in store. Looks and individual items
• Scan & try
• Express Check out paying from mobile without going through the cash register
• Extreme customisation for some products
• Selection of the goods displayed based on online analytical criteria for the specific geographical area where it is located
• Members of Nike Plus community enjoy special perks and privileges such as personalised assistance, express shipping and increased product customisation possibilities

Mhe works for major chains and brands improving retail strategy and operations

Retail Customer Experience Optimisation

For some conventional Retail chains, flagship adjective is synonymous with point-of-sale that generates heavy losses. Therefore efforts by some brands like the one Nike makes in this new flagship only have a good reason to be when there is a clear focus on omnichannel and core wholesale activity.

More info: carlos.dominguez@mheconsumer.com

www.mheconsumer.com