Hi all. Congrats for this blog. I would like to add a recent example from the
US. It is actually more a co-operation approach of one company with changing partners than a long-term co-operation between the same two companies. But i think it really is a great example of how co-operation partners can open up new distribution channels. At least i think it fits in this selection 
So what am i talking about? In october 2006, STARBUCKS started to open its over 6,000 outlets in the US for the promotion of one book at a time. The first book to come along with White Chocolate Mocha Frappuccino & Iced Caramel Macchiato was Mitch Albom’s “For One More Day” (publisher: hyperion). An instant #1 New York Times Bestseller, starbucks sold 92’000 copies within three months. Not too bad for the baristas, but they actually can do even better …
The second book was “A Long Way Gone: Memoirs of a Boy Soldier” by Ishmael Beah (publisher: b&t) who also toured several starbucks locations to read from his book. Telling the true story of a former sierra leonean child soldier, his book was sold more than 62’000 times at starbucks – within only THREE WEEKS! (NYtimes.com members can read the first chapter here).
Starbucks chairman Howard Schultz seems to be pleased with this: “the success of the book, in terms of units sold, is exceeding our expectations” he told the New York Times. And how could he not be? The mermaid brand has contributed to word-of-mouth and sales success of the book - and for sure they have received their fair share for his. The third book is said to already be under way for release in fall.
So far, other coffee chains in the US and Europe did not take up the idea (correct me if I am wrong). But I am almost sure that we will see more co-operations like this in the near future. Let’s see who is next…
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6 responses so far
Hi Jewel. Starbucks is indeed a great co-operations example. Did you know Starbucks has been selling music for almost 3 years now? They started in 2004 with the exclusive distribution of Ray Charles Genius Loves Company. High sales figures proved that people are not at all averse to buying CDs in coffee shops (http://www.businessweek.com/magazine/content/04_47/b3909094_mz017.htm). Only recently, Starbucks has even gone a step further by creating its own label, “Hear Music”, with Paul McCartney rumoured to be the first artist they will sign (http://music.guardian.co.uk/news/story/0,,2032739,00.html). So should we still refer to Starbucks as a coffee shop chain? It seems Starbucks is virtually transforming into a retailer, although I doubt they will take it as far as the coffee chain Tchibo.
Hi philipp. You are right. The co-operation around books is not the first expansion of their core business.
But I think they are taking it a step too far with their own music label. As a customer it makes perfect sense for me that I can buy the music running in their outlets: I can rebuild a bit of the Starbucks atmosphere at home with packed coffee and CDs. And I can also get used to their selling one (or maybe even two) selected bestseller books at a time since this fits to the outlet experience. But an own music label? I think this is stretching it a bit too much. Why should anyone believe that the baristas are experts in compiling and producing music??? It is just too obvious that this is not an attempt to improve the customer experience but to boost the own sales.
In my eyes there is a clear difference between co-operations that provide a value added to the customers (e.g. CDs with the outlet music, books, …) and attempts to (ab)use existing customer touchpoints as sales channels for other products. Value ADDED is ok, but not bothering your target group with whatever products might sell well (or yield the highest recompensations from the manufacturer…)! Unless, of course, you are or decide to become a retail channel. If I understand Tchibo correctly, they took this step at some point in time. Then it makes perfect sense to sell a lot of different things. But on the other hand I would not see them as coffee experts any more…
For me Starbucks is still a coffee chain and they might initiate some more co-operations to even strengthen this. But they will never have a chance as a retailer against the Wal Marts, Tescos and Aldis of this world. And they should not even try!
Well said! I totally agree with your statement on value added. In fact we like it so much that we have decided to cite it as the “quote of the week”. Hope you are fine with this…
As of May 21, Starbucks is selling “A Long Way Gone: Memoirs of a Boy Soldier” by Ishmael Beah in UK, as well.
Starbucks is now co-operating with a publishing house in Germany as well: Waiting for the barista to hand out your coffee, you can pick-up a flyer containing an exclusive preview excerpt of Paulo Coelho’s new novel “Witch of Portobello” (”Die Hexe von Portobello”) and a coupon for participating in a raffle for books or Starbucks mugs signed by Mr. Coelho.
This does not only seem a good away of bridging - the never avoidable - waiting time, but also to test the German Starbucks customers’ interest in “reading material” in a coffee chain. Even if this proves to be only a one-time promotional co-operation, Starbucks will certainly gain some valuable information on the potential of selling books in their stores. Let’s see if there is more to come…
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