Apr
7
Competing with Starbucks
April 7, 2007
Category killers have been around for a long time. Wal-Mart (WMT) hurt all sorts of businesses over the last three decades, and when Home Depot (HD) and Lowe’s (LOW) came along many neighborhood hardware stores were forced to close.
There are however, many stores that have competed and thrived in the Wal-Mart / Home Depot world. This is not their story, though I may choose to write about them at a later date.
This is the story of two local coffee/tea shops that have not only competed with Starbucks (SBUX), their Category Killer, they’ve thrived.
First some quick stats on Starbucks, taken from their 2005 Annual Report: Stores: 10,500+
-Employees: 100,000+
-Store openings 2005: 1,672
-Projected store openings 2006: 1,800
-Global Presence: 37 Countries
-2005 Revenue: $6.4 billion
With over 10,500 stores around the world, and most of them in the United States, it’s hard not to pass a Starbucks during your daily routine. In Manhattan, there seems to be a Starbucks on almost every block… and they’re all packed with customers!
In Brooklyn, just minutes from Manhattan and the Brooklyn Bridge, their are two very hot neighborhoods; Park Slope and Brooklyn Heights. You would think that these neighborhoods would be packed with Starbucks stores, but they’re not. There are a few but they’ve been out-flanked by two local coffee/tea shops: Le Petite Cafe and The Tea Lounge.
What these neighborhood shops have done is fill a niche that Starbucks can’t fill… or won’t fill, because it doesn’t fit in the Cookie Cutter design that has made them successful.
Le Petite Cafe, with only one location has grown from a small coffee shop to a mid-sized restaurant. The interior design is very beautiful and incredibly unique. Features include:
-Michelangelo’s “The Creation of Adam” from the Sistine Chapel, painted on the ceiling.
-A toy train traveling around the cafe about a foot from the ceiling.
-A built-in waterfall located in a beautiful outdoor space.
The Tea Lounge, on the other hand just opened it’s third location in Brooklyn. The feel of their stores is much more relaxed than both Starbucks or Le Petite Cafe. Highlights include:
-A young, “hip” staff. Often tattooed… always nice.
-”Lived-in” furniture (sometimes so lived in there are holes in the couches).
-Comfy couches everywhere.
As you can see, both Le Petite Cafe and The Tea Lounge have found a niche that differs themselves from Starbucks. They also offer great service… and great quality.
It’s not easy to survive if you’re competing with a category killer. However, if you’re able to find a niche and provide equal or better service… your business might not just be surviving… it might be thriving!
Subscribe
