Starbucks goes “glocal”

Starbucks has as many detractors as fans. The ubiquity of the chain has created a resistance to the cookie-cutter atmosphere, so different from an independent, neighborhood coffee shop.

Photo: AFP/Getty Images

And so enter the next phase of the Starbucks brand: the tailor-made coffeehouse concept, reflective of both the local environment and a hipper aesthetic. One of the newest Starbucks coffeehouses is in the Mongkok neighborhood of Hong Kong. Mongkok is best known for its markets, offering everything from birds and flowers to discount sneakers. The crowds are reminiscent of Times Square, and it’s one of the many places in the world where stepping into a Starbucks can feel like sweet relief: safe, orderly and familiar.

But this particular Starbucks, tucked away on the second and third floors of a nondescript building, is less familiar. The walls are splashed in colorful, graffiti-like Chinese characters, mahjong tiles and old street signs. There is a mix of wooden chairs and soft sofas, and on a recent Saturday afternoon almost every available seat is taken. The third floor has an old-fashioned film theme, with big, black-and-white photos of local street scenes. There are heavy velvet curtains and plush theatre chairs. There’s even a small cinema with free admission offering monthly seminars.

This particular Starbucks is hip, busy, vibrant, but with a slight undercurrent of noir. It feels very much like Hong Kong. Starbucks partnered with artist Stanley Wong and “lifestyle brand” G.O.D. (Goods of Desire, which sells very pricey local tchotkes).

In an interview with the magazine Surface Asia, Quenifer Lee, Starbucks’ Hong Kong-based director of store design for the Asia-Pacific region, explained the shift towards creating unique environments: “We have chosen to gradually enhance selected stores to celebrate and reflect the local culture in that specific store’s immediate surroundings, capturing the essence of a third place.” (The “third place” Lee refers to is a comfortable space beyond home and work, ideally one where consumers stick around long enough to try one of the new breakfast sandwiches Starbucks has been trying so desperately to push.)

But adapting a brand to both local tastes and an evolving marketplace can be fraught. According to Shelley Rosen, CEO of Airlift Ideas and a global branding expert, a brand is a promise to consumers, and there are certain things that have to remain consistent to keep that promise. “I’m sure those stores do have the expected Starbucks products, and the same coffee recipes,” she says. “But the secret to global brands is that they’re actually both global and local. People have to feel like this is my Starbucks.”

One of the best examples of the “glocal” approach to taking over the world is McDonalds. You can get a Big Mac around the world, and the taste is near identical whether you’re in Tel Aviv or Telluride. But you can also get a McLobster in Halifax or a Samurai Pork Burger in Bangkok. In France, you can get Gruyere on a burger instead of processed cheese.

But some things are not flexible, says Rosen. For instance, the immediately recognizable Starbucks logo. Core products and pricing should also be consistent across markets. Indeed, in that Hong Kong coffeehouse, the counter area, with its array of scones and sandwiches, plus signage outlining the price of macchiatos and frappacinos – is an exact replica of every other Starbucks.

Starbucks has publicly named China its “second home” after the United States and plans to have 1,500 locations on the mainland by 2015. Earlier this year, it entered the Indian market by partnering with the Tata Group. And beyond the coffeehouse model, Starbucks has made other adjustments to local preferences: drive-through shops in England, lighter espresso roasts in France, and avant-garde spaces (complete with poetry readings) in the Netherlands.

The tinkering is paying off. The most recent quarter saw record sales of $3.4 billion worldwide, and a dramatic increase in share prices. Howard Schultz, the CEO who returned in 2008 to straighten out the then-struggling chain, last year published Onward: How Starbucks Fought For Its Life Without Losing Its Soul. He said that building on the success of Starbucks requires the return of a neighborhood feel to one of the most powerful and ubiquitous brands in the world.