Starbucks CEO Howard Schultz won't say what the Starbucks of the future will
Or taste like. Or even smell like.
But even with his company rolling in record profits and record sales, with 18,000 stores in 62 countries -- a time when it might seem like he could sit back and enjoy the results of his 31 years with Starbucks -- he admits to having gee-whiz plans on the drawing board. Not that the ultra-savvy innovator will publicly discuss them in any detail.
"Sure, we're doing work now on the store of the future," says Schultz, whose company's stock price is near an all-time high and whose market cap is around $43 billion. "It is not only linked to the physical but the digital experience."
The store has not been built. There is no working model. And the project doesn't even have a name. "You'll know it's a Starbucks store, but you'll know that you'll be walking into a significant evolution," he says.
The parameters are wide but the central focus is very clear, he says: "If we were competing with Starbucks, what would we do?"
No resting on laurels
Success, he says, means never standing still. That's a concept that all innovators -- large or small -- must embrace, says Schultz. Many of the changes to come to the Starbucks brand will be related to new technologies -- some of which, like mobile payment, are already in motion. Many of the changes will be related to health and wellness. And some of the changes will relate to Starbucks as a broader consumer brand. In an exclusive interview, Schultz spoke candidly with USA TODAY about being an innovator and icon -- and just how far he believes he can stretch the Starbucks brand without breaking it.
"Our history is based on extending the brand to categories within the guardrails of Starbucks," says Schultz, 59. But the key to success is to remain true to the brand, he says, "and not abuse the trust people have by going off and doing things not consistent with the heritage of coffee."
Starbucks has been burned -- more than once -- by going that latter route.
Starbucks quickly went in and out of the movie business. It tried selling an adult-focused, specialized chocolate beverage that flopped. It even concocted a carbonated coffee drink that failed.
"No one in America wanted to drink it," recounts Schultz. "We have tons of it still lying around."
But here's the key: Failure didn't make Schultz innovation-adverse. Schultz has never stopped pushing the innovation edges. Much innovation at Starbucks over the next few years will be focused on health and wellness products. "You'll see it in many forms," he says, declining to be specific. "Starbucks has a license to participate in this."
Some of that innovation will be related to the recently acquired Evolution juice brand -- which could stretch into categories beyond juice such as healthy foods, snacks and beverages, Schultz says. But one of those categories will not be vitamins, he adds.
The bulk of Starbucks' innovation over the next several years will be technology-focused, Schultz says. Not surprising for a company that claims an astounding 54 million Facebook fans globally.
"We are witnessing a seismic change in consumer behavior," he says. "That change is being brought about by technology and the access people have to information."
How folks pay for their Starbucks coffee could be the nearest-term change with the widest impact.
Already, Starbucks is producing more than 3 million mobile payments per week. That, says Schultz, exceeds the combined mobile payments of the next 10 companies closest to Starbucks. "This will result in a much deeper experience with our customers," he says.
For consumers, that will mean much more one-to-one marketing, says Schultz. That is, specific deals and promos could be specially targeted to individual consumers based on their buying habits.
Then, it gets really cool.
Sooner than later, Schultz projects, regular customers might not even have to belly-up to the bar to order. Rather, based on the information on a mobile phone app that they're carrying, they could be "recognized" as being in the store -- and baristas will have the option to start preparing their usual favorites, without them having to actually order.
"We'll take customers on a journey," Schultz says. "It will be very coffee-forward."
At the same time that Starbucks markets to customers one-to-one, it also will be offering more micro-lots of single varietal coffees -- "like rare or cult wines," says Schultz. While these rare coffees will not be inexpensive, "I don't want them to be at an unaffordable price point."
The technology and the pomp used to prepare coffee at Starbucks stores down the road may be very different from the current system, Schultz says. He doesn't know exactly what it will be. But, Schultz says, enhanced reality isn't out of the question. He recently watched the Life of Pi in 3-D after initially seeing a conventional version of the film, and the difference, he says, was startling. "I'm not saying we'll use 3-D," he says. "What this is really about is how you use technology."
In any case, innovation will continue to be the hallmark of Starbucks, he says.
His most direct advice to innovators: passion. "You must find something that you deeply love and are passionate about and are willing to sacrifice a lot to achieve," says Schultz.
There's just one more thing every successful innovator needs. "As trite as it sounds, you need a little luck."
Schultz, arguably, made much of his own luck.
Going the distance
The simplest innovation that Schultz craves: to create such an outside-the-box Starbucks coffee product that he'll feel confident enough to finally open Starbucks coffee shops in Italy.
It was the trip that Schultz made to Italy in 1983 that gave him the incentive to establish a coffee shop chain. But even with Starbucks stores around the globe, it has not yet entered the Italian market. "That's a dream that I have yet to accomplish," he says.
Schultz's dream, beyond the Starbucks brand, is for bipartisan cooperation in Washington. While he has not stated any personal political ambitions, Schultz says politicians need to know that "their greatest responsibility isn't to a party, but to the American people."
His optimism is slightly tempered by his concerns.
"The future of America is not an entitlement," he says. "We have been given a treasure chest of gifts and opportunities, but some people are being left behind, and success is not sustainable unless it is shared. Everyone must have a shot at the American Dream."
Even if it's just one cup at a time.
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