Brand New View

Starbucks and Paul McCartney

Starbucks seems like it has been all over the news recently, particularly due to Howard Schultz's internal memo of a few weeks ago regarding the company's efforts to regain its mystique and magic after 15 years of frenetic growth. At this week's annual shareholder's meeting, Schultz discussed Starbuck's latest move: the signing of Paul McCartney to its Hear Music label.  Starbucks has been selling music for years and, more recently, having lesser-known artists represented on its label.  But the signing of Paul McCartney is a very different and significant event.  McCartney is a legend, of course.  Even as he enters his mid-60s, he continues to write, record, and tour and appears not to have aged much since the Beatles heyday.  Although other artists sell more records than McCartney these days, he is still a huge money maker for any company, not to mention a true music icon.  Is Starbucks' signing a good thing for both?  Time will tell.  Is Starbucks departing from its core brand?  That is hard to answer as well.  Had they not been involved in music the past several years, then this announcement would be a surprise.  But Starbucks has crafted an image around more than coffee and music fits in nicely with it.  This is certainly fun to watch as two venerable brands reshape themselves.

The Heineken Hong Kong Experience

Today's Asian Wall Street Journal discusses the efforts by Heineken, the Dutch brewer, to open its first Heineken-themed bar at Hong Kong airport.  It is particularly interesting that this bar is in Asia, a region still seen as better at copying than innovating.  The Heineken bar is part of a long-term plan to develop similar bars in key airports around the world to create a more engaging consumer experience connected directly to the Heineken brand.  Borrowing slightly from Starbucks' playbook, Heineken hopes to make these themed bars destinations that increase total beer sales, including Heineken's signature green coloring, plus signage and memorabilia affiliated with the beer. The bars will feature Heineken and Amstel (another beer they make) on tap, but also a wider variety of competitor beers by the bottle.  Speaking of Amstel, Heineken opened 20 'La Amsteleria' bars in Spain in 2004 and claims that these bars sell 10 times more beer than regular bars, of which most are Heineken/Amstel-labeled beers.  Will the new Heineken-themed bars work?  It is too early to tell, but I think the idea of making more compelling destinations for consumers is a smart business move.  Few companies do this well, which is why most retail stores are dull and uninspiring, with horrible service to match.  I was working at Nike when the first Niketown stores opened, and there was palpable excitement in the company partly because we saw the stores as a way to create retail environments that involved consumers directly with the brand by conveying Nike's personality more effectively than the average retailer could or did.  WIth globalization comes the risk of accelerated commoditization, so companies that succeed will do so by focusing on creating great experiences, in addition to great products, that truly differentiate their offerings from those of their boring competitors.  It is my bet that the majority of profits will flow to the innovators, not the copiers.