A good user experience should encourage people to buy a product or use a service. Because it is both different and memorable, a well designed user experience Â should motivate people to choose one product or service over potential competitors. Why then, doesn’t it seem to be working for Starbucks right now? If what made Starbucks great was its delivery of a great user experience then why is Starbucks struggling? Has the company gotten away from offering its coffee experience or is it just the economy? The answer may be a combination of factors.
An article about Starbucks suggests that both the rise and downfall had much more to do with economic factors than the design of a better coffee experience. The article goes so far as to say that Starbucks is a leading indicator for the broader economy. Here’s the short story. Go back to 2006 when Starbucks stock was at its peak and its expansion seemed unstoppable. The real estate market was on fire. The stock market was on the rise and a 14,000 Dow was not unthinkable. With more money in their pockets and a positive economic outlook people looked forward to Starbuck’s affordable luxury. Fast forward to 2008 and Starbucks is a much different company. Fewer stores, fewer variation in the product line and fewer customers. McDonalds is picking up business with their cheap – no UX – coffee. When it comes to the difference that UX can make, are all bets off during a recession? Does cheap trump experience when times are tough?
Not according to Jonathan Picoult, a UX design consultant. In an article in which he asks if “the experience economy is contracting towards irrelevance”, Picoult also asks how it is that Starbucks, a model for the experience economy (a reference to the 1999 Pines and Gilmore book), is operating far below expectations, and asks if this signals that the UX concept is not impervious to economic downturns. The answer to the question of relevance, for Picoult, is a definite no. While he acknowledges that experience-focused organizations are susceptible to the same economic cycles as industrial and service firms, he advocates that now is the time to stay focused on experience building.
Here are three reasons. First, while it may be necessary to scale back on an ambitious UX plan during a recession, there’s no reason not to expand efforts to enhance the personalization of services. This may be the best time to connect with customers. Now that they’re not getting their gratification from acquiring material objects, good experiences don’t necessarily cost them anything and they’ll appreciate it. Second, bad customer experiences actually end up costing the organization more because they waste time and require extra work to make up for foul-ups and problems. Moving the organization towards a total customer experience may actually improve the bottom line while keeping the user community happy. Third, user experiences and the design of them is a low-tech proposition. This is hardly the time when organizations will be investing in costly new technology. Creating great user experiences will be far less costly than adopting new hardware or software systems.
So even though Starbucks, the poster child for the user experience, is performing below expectations during the global economic meltdown, it doesn’t mean that the entire experience economy concept is a failed idea. It does tell us that user experience design is susceptible to setbacks. And other analysts have pointed to a rash of problems, such as moving away from the idea of differentiation when they made moves to compete with Dunkin Donuts by adding breakfast sandwiches and lower priced coffee options, that have effected Starbucks bottom line. It is possible that the best Starbucks’ strategy is to stick with the experience model, and to retain their core of loyal customers. Starbucks may actually be exploring new directions by trying to create an entirely new and different instant coffee experience, which CEO Schultz described as “not your mother’s instant coffee”. I agree with Picoult that promoting the user experience is still a good strategy – even in recessionary times. And for libraries that will be forced to trim book collections, eliminate an expensive database or two, possibly reduce staff or hours or implement other retrenchment measures, enhancing the user experience seems a logical and not too risky or costly way to stay connected to the user community.