Chapter 15: Retailing

Retailing is the major part of the sales process of a good or service.  Everyone encounters a retail location at least a few times a week, whether it is a supermarket or department store.  Starbucks falls into the category of a specialty retailer, which is a retail establishment specializing in a given type of merchandise.  Coffee or other morning beverages are Starbucks' main merchandise.  Starbucks is also classified as a chain store, which is a store owned and operated as a group by a single organization.  In North America, most of the Starbucks locations are company operated.   However, the company sometimes has licensing arrangements with companies who provide the right to use particular locations that would otherwise not be accessible.  For example airports, grocery chains, colleges/universities, etc.  Some people see Starbucks as a franchise, which is incorrect.  Starbucks’ subsidiary (a company controlled by a holding company) Seattle’s Best Coffee, does franchise the operation of its cafes and kiosks.  As of the middle of 2008, the subsidiary had over 540 cafés in the U.S. as well as nearly 100 espresso bars.  But since Starbucks' stores are run by the company and not combined with independent ownership, it remains a chain coffee shop.

I have visited several Starbucks locations and now that I attend Borough of Manhattan Community College, I visit a smaller location on Chambers St. right outside of the 1, 2, and 3 trains.  At the beginning of the semester, I was a bit skeptical in going to that location since it is rather small but since it is Fall season, that means Pumpkin season!  I don't go to Starbucks all the time but when it's pumpkin season, I love to have their Pumpkin Spice Latté.  I visited the Starbucks during a high traffic part of the day, around 2:00pm when most people are on lunch break, and there was a huge line.  They had an associate come over to me, take my order, and speak it into a microphone for the baristas to make the order.  When I visited the cashier, I just had to tell them what it is I told the associate taking the order on the line, pay for my order, and since the associate on the line took my name, I just had to wait for my name to be called.  It was a rather quick process and I think it's pretty organized, even though I get worried if they get too many orders at once and mine may be forgotten.  Where I used to work in SoHo, there was a Starbucks on the corner and because of the high congestion and smallness of the location, they also did the same process and it always worked, at least for me.  The people who work at Starbucks care about their customers and makes sure they are assisted as quickly and nicely as possible.

As most people may notice, there are Starbucks locations all over the city, some within a block from each other.  Starbucks looks for densely populated urban communities for its stores.  There are even Starbucks coffeehouses located in Target locations as well.  This is a great marketing strategy and helps them build their company.