Starbucks Is Now Open for Loitering and It's a Terrible Business Decision
Starbucks, in an effort to walk back from the recent bad press it received, has just made a terrible business decision. Did you catch it?
According to USA Today and other reports, the company, in a letter to its employees this past weekend, said that “any person who enters our spaces, including patios, cafes and restrooms, regardless of whether they make a purchase, is considered a customer.” Starbucks employees were told to follow company procedures for people that are acting in a "disruptive manner," particularly when there's a potential safety concern.
The company is also asking its customers to "behave in a manner that maintains a warm and welcoming environment by using spaces as intended, being considerate of others and communicating with respect." That’s fine for “customers.” But if a guy’s not buying any coffee how can you call him a customer?
It’s a terrible mistake and it should be a fascinating business lesson, not only for the giant coffee chain but for the thousands of smaller, independent coffee shops, merchants and restaurant owners that operate around the country. Why?
First of all, consider my local Starbucks (which by coincidence is the one located at 18th and Spruce Streets in Philadelphia, where the now infamous racial incident that occurred last month). I go there all the time. Unfortunately, so do lots and lots of homeless people who sleep the nights in nearby Rittenhouse Square looking to use their bathroom or to get a cup of water. The employees at that location are great -- always providing but then politely moving them along. (Let’s please not get into a homeless debate here: It’s a terrible and sad problem. But anyone who lives in a city like me knows the best thing to do is to contribute to organizations who can provide food, clothing and medical care for this population.)
Once word of this new policy spreads -- and it will spread quickly -- my expectation is that this location will be residence for many indigent people...all day long. If you were homeless, wouldn't you do the same? As long as you're "considerate of others" and "communicating with respect" (whatever that means) you can sit there from opening to closing and enjoy warmth, security, a bathroom and as much water as you can drink. It'll be interesting to see the impact this has on all the other customers who use that location as a place to meet friends, study or relax with a latte and a book. My prediction: Bye-bye, Starbucks.
Secondly, what will Starbucks do if the policy fails? Has this really been thought through? Was it even tested during this past month? Please, don’t ever do this in your business. Yes, we all sympathize with the homeless, but do you sympathize so much that you would sit next to someone who’s been living rough (and smells like it) after spending six bucks on a Frappuccino? And what about their employees? Does the company realize just how much more difficult their jobs will become? Will Starbucks lose valuable people due to the added stress from adding “policeman” and “psychiatrist” to their already long list of job duties? I think so.
There is potentially good news from this decision, particularly if you’re one of the thousands of coffee shop, store or restaurant owners around the country. It’s quite possible that the influx of homeless or other people who aren't paying but use Starbucks like a bus station waiting room will drive existing Starbucks customers to you. But then again, it’s possible that the Seattle chain's supposed "benevolence" may force you into doing the same -- or bear the wrath of activist groups, social media trolls and bad headlines. Will this force the many independent business of chains like Subway and Dunkin' Donuts to do the same? Ugh.
So let’s see how this plays out. I’m ready to buy my coffee at any of the dozens of local merchants nearby if my local Starbucks becomes uncomfortable or undesirable. You know what? I should be doing that already.