Starbucks' experience goes beyond caffeine for ``Everyday Explorers''

Tuesday, May 28th 2002, 12:00 am
By: News On 6

SEATTLE (AP) _ What began with a simple cup of coffee is evolving into a coffee experience.

With compact discs, chewing gum for coffee-drinkers and now, the launching of a new board game in 800 U.S. stores this week, Seattle-based Starbucks Coffee Co. is becoming the Starbucks Culture Co.

Coffee drink sales clearly drive Starbucks' revenue, making up 75 percent of last year's retail sales of dlrs 2.2 billion. That dwarfs the 4 percent from non-coffee merchandise, including everything from coffeemakers to compact discs.

But the dollar amount _ nearly dlrs 90 million last year _ is far from negligible. And persuading customers to take home that Starbucks feeling has effects that go beyond the bottom line.

``They want to promote this idea of a coffeehouse where people congregate as a kind of surrogate living room,'' said Peter Gurney, managing director of Seattle-based Kinesis, a customer-relations research consulting firm. ``And anything that is going to support that kind of club that they develop, that club mentality with their marketing is of great value to them.''

Starbucks customers tend to be ethnically diverse, have high household income and are slightly more female than male, said Darren Huston, Starbucks senior vice president of new ventures. ``We call them the everyday explorer,'' he said.

The everyday part of the customer wants a fast, consistent cup of coffee in the morning, he said. ``The explorer represents that most of our customers are a bit curious. ... They want us to surprise and delight them.''

And extending the Starbucks Experience helps the company extend the Starbucks name, he said. Growth is happening at a fast clip. The chain has added nearly 700 new stores in the United States since October and now operates more than 5,400 stores around the world from Madrid to Tokyo.

Starbucks spends relatively little on advertising, said Sharon Zackfia, a research analyst with Chicago-based William Blair and Co. While much of that has to do with the quality of the coffee, she said, the added products help reinforce the overall Starbucks culture and name.

The company's offerings have expanded greatly since its first store, selling coffee-making equipment, opened in 1971. The chain added compact discs, offering selections ranging from blues to Brazilian ``that appeals to discerning and curious adults. We don't have Britney Spears,'' Huston said _ in 1995.

It added the board game Cranium, developed by two ex-Microsoft employees for Starbucks to its merchandise line in 1998, and now even sells items as stuffed bears or ``bearistas'' for the holidays.

The stores themselves exude a sense of Starbucks chic of mellowness and muted tones. Many offer armchairs for lounging and about 700 Starbucks coffeehouses are connected to ``wireless fidelity'' networks, which allow customers to bring in their wireless-enabled laptops to connect to the Internet. The company plans to have about 70 percent of its stores connected to such a network within the next two years, Huston said.

``Part of the appeal on the part of the customer is they are going there for the experience,'' said Dan Geiman, an analyst with McAdams Wright Ragen. ``They're kind of instilling that a little bit.''

And the latest addition is the Hear Me Out! board game, which will be available in 800 of Starbucks' larger stores in the United States and Canada on May 29.

Although Starbucks would not disclose sales of the Cranium game _ which was named the Game of the Year by the New York-based Toy Industry Association _ its success persuaded the retailer to solicit new game ideas from manufacturers last August.

The winner: Woodinville, Washington-based Bensussen Deutsch & Associates, a merchandising company that makes everything from corporate logo mugs to Spider-Man bobbleheads.

Although general board-game sales actually declined slightly last year, both Cranium and Hear Me Out! target people who aren't traditional board game-buyers, said Shannon Eis, a spokeswoman for the New York-based Toy Industry Association.

Hear Me Out! includes three main categories under which players compete. The ``brainstorm'' category involves timed free-associations on topics such as brands of gasoline and airplane food; the Survey Says! category gives the player 45 seconds to guess the top three responses to categories as ingredients of a hot dog and worst cities to live in; and Sound Bite in which a player has to improvise or perform assignments as leaving George Bush a voicemail message and giving an acceptance speech as a newly crowned Miss America.

The game manufacturers tried to incorporate their sense of the Starbucks culture into the game, emphasizing an interactive, conversational purpose to the game.

``Starbucks is a destination point,'' said Jay Deutsch, the chief executive and co-founder of BD&A. ``You sit down, enjoy your coffee, enjoy the time you spend with friends and family. ... When's the last time you had a cup of coffee and didn't have a conversation with somebody?''