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I recently finished reading Onward, the book about Howard Schultz, the former president and chairman of Starbucks, who in 2008 returned as the CEO eight years after gave up daily oversight of the company and became chairman.
He saw that the company’s financial struggles were a result of its straying from the core values that drove its success – its focus on service, its expertise in all things coffee – as its store count grew.
He wrote: “We weren’t innovating in lasting ways. We were venturing into unrelated businesses like entertainment, and we were pushing products that deviated too far from the core coffee experience.”
As a result, Starbucks became just another place that offered coffee – expensive coffee – at a time when people were looking to spend less. It took drastic measures from Schultz to resurrect the “Starbucks Experience” that drove the almost cult-like loyalty it once had. Indeed, one of these measures was to shut down every Starbucks in the country for a day to retrain its employees on how to pour the perfect cup of espresso, as being the undisputed coffee authority was top priority in its transformation agenda.
The success of Starbucks transformation and resulting revitalized sales shows just how important it is for retailers not only to clearly define what their core values are, but to stick to them.
This is not always easy to do, especially in a down economy, but in the long term will solidify your brand message and value proposition with your customers.
Goodwin’s Organics in Riverside, Calif. is a perfect example of a retailer with clearly-defined core values. The only food products it sells are those that are certified organic. Nothing else. If you want a conventional food product, you must shop elsewhere. But if you’re an organic food buff, the store is a Godsend. No wading through conventional food items to search for hidden organic offerings. Anything they pick up – from produce, to packaged foods, to prepared pizza – is made with certified organic ingredients.
Wrapped around these offerings are a variety of educational programs and additional services related to Goodwin’s core theme of healthy eating. There are regular cooking classes, as well as a wealth of information about the health benefits of organics on the grocer’s blog.
And since many of Goodwin’s customers are students from the University of Calif.-Riverside, owner Martin Goodwin provided plenty of space where they can study while enjoying a healthy meal – the store features four outside seating areas with free Wi-Fi, and an indoor lounge, which has its own entrance and is open later than the regular store hours. (While the store is closed, someone is on hand so students can still order food from the prepared foods department).
But everything remains tied to the theme of healthy eating, and doesn’t deviate.
Another example of a grocer that sticks to its core values is Newport Avenue Market, which is featured in this month’s cover story of Progressive Grocer Independent. If you are a foodie in the Central Oregon market, and you want nothing but the best ingredients, you shop at Newport. If you want a 99-cent beef patty, you shop somewhere else.
Newport owner and “Head Cheerleader” Rudy Dory sees his store as a place where even the most serious food connoisseur can still discover new and wonderful ingredients, and he is constantly traveling the country visiting food shows to make sure Newport Ave Market is the cutting edge of fine foods.
Are your core values defined? One way to find out is to ask your customers if they know what they are from their experience in your stores. If they can summarize your offerings in a few words, such as “only the best ingredients,” or “only certified organic foods,” then you’ve done a good job defining them.
If they can’t sum up your store’s offerings in a few words, or worse -- draw a blank – you may want to revisit them, as just Howard Schultz did with Starbucks.