Visual Merchandising at Starbucks

When it comes to presentation in retailing, the key objective is to implement a retailer’s strategy. With Starbucks being a service provider rather than a product merchandiser, its interior design mainly focuses on how customers want to experience the shop while they’re there… However, that’s not to say that Starbucks will avoid seducing its customers with their drinkware, coffee presses and gum.

Thus, here are three feature areas designed to get your attention at Starbucks:

- Image 1 portrays a cash wrap, also known as a point-of-purchase counter. Businesses of all types love utilizing this space which is located near the register to get you to buy those cheap impulse purchase items. 

- Image 2 makes use of the “decompression zone” which is the first 10 feet in which customers become adjusted to their new environment, these are typically located near the entrance.

- Image 3 showcases a freestanding display, these bad boys are often used for displaying a retailer’s newest and most exciting offerings.

P-O-P Display

Freestanding Display

Entrance Display

Labor Scheduling at Starbucks

To create an ethical workplace, Starbucks strives to schedule fair and compensate accordingly. The images below portray a handbook that newly-hired employees receive during training; this handbook highlights the guidelines Starbucks and its partners should follow every single day to ensure honest and moral success.

Employees are a company’s largest operating expense, and nothing is more critical than scheduling accordingly. Most managers in the United States rely on scheduling systems when it comes to professionally placing employees on an effective timetable because the software is simply more reliable in that it analyzes average sales, transactions and customer traffic better than a human. Unfortunately, mishaps happen and the software may underestimate how many workers will be required for a certain time period…

On page 11 of the handbook, a guideline states that Starbucks is committed to following all applicable wage and hour laws… Therefore if the store were to run out of scheduled employees, they simply cannot ask the present workers to stay past their scheduled shifts to cover the absence of others unless they are compensated for that said time.

Category Captain

When a retailer is struggling to manage a particular category, it often seeks a category captain for support. A category captain is a supplier who is more than willing to form an alliance with a retailer to help them improve performance/profit within a said category.

For example, let’s say Target has its own private brand of baby food but is consistently struggling to manage that category because they don’t know what kind of baby food parents want. In order to gain a level of expertise, they might partner up with a national brand, such as Gerber. Once Gerber is on board, they begin putting their products on the shelves… This a win-win for both parties because now Target is finally able to make money, and Gerber also makes money from having their products sold. 

So what about Target’s private brand of baby food? It might grow and expand, or Gerber might try to limit it now that it’s in control.

In marketing, “letting the fox into the hen house” is a saying that describes a situation where a vendor takes advantage of its position by attempting to take over the entire category.  This might be the situation here at my local Target as the image to the left shows Gerber taking the prize for dominating this specific isle...

Traditional Media Elements

Retailers communicate with current and potential customers using a variety of traditional media elements to maximize their mass media advertising outreach. These include but are not limited to: newspapers, magazines, catalogs, billboards, radio and brochures.

Although non-traditional advertising has been on the rise through blogs, e-mail, and social media, people aren’t quite ready to say goodbye to tangible, direct mail; I know I’m not. Here are three examples of physical advertising that I have received via my mail box:

Brochure

Catalog

Newspaper

RFID Technology

Radio frequency identification (RFID) is technology that comes in a form of a tag that allows an object to be identified at a distance through the use of radio waves.  These tags are placed on merchandise, varying from shoe boxes to books, and they might eventually replace traditional barcodes.

Although this microchip technology is costlier than barcoding, it appears that retailers and vendors end up benefiting from them over time. With this technology, stores are enabled to receive a real-time measure of their inventory levels which can help reduce stock-outs and we all know that when a retailer’s sales increase due to fewer stock-outs, vendor sales also end up increasing. 

Here’s a picture of the RFID stickers that I’ve found on the inside of one of my textbooks. This technology helps stores/libraries keep track of their merchandise as they move around the premises, and since these tags are sensitive to exit gate sensors, any theft made would set off the alarms. 

Target’s Frequent Shopper Program

Target does a fantastic job at making their customers feel like they're always saving a buck or two.
They have 3 particular ways of doing this:

• REDcard – is a store credit/debit card with a simple “cashback” concept, you simply get 5% off anything, and everything you purchase either in-store or offline. This program not only saves you money, but it also contributes to local schools through donations. 
• Cartwheel by Target – is an app that allows you to scan products in-store to find offers during your shopping run. All you really have to do is add items, and then scan them, but it can be a hassle… Sometimes the scanner doesn’t work, sometimes there are glitches and sometimes it even logs you out.
• Coupons – cardholder or not, every time you shop at Target you always get coupons printed with your receipt. These coupons tend to offer discounts on products you might be interested in the future based on what you just bought.   

side note: when it comes store cards (debit/credit) consumers should be aware that they’re pairing up their bank account information with the brand’s database; with their sensitive data floating around in other data warehouses, customers should always keep an eye out on their bank statements in case of any data breaches. 

Here I have attached a picture of my Target goodies: Cartwheel App, Pharmacy Card, REDcards, including the new and revamped version that contains a chip :)

Sign Visibility

Visibility is a very important concept when it comes down to store signs and advertisements. Businesses figure out where and how they place their signs based on the direction of traffic flow. You might think that just because a retailer pays for the location they're renting in, they could make their signs as big as possible, but unfortunately, there are laws and regulations that prohibit this.

Here is a picture taken in Mobile, Alabama (where my boyfriend attends school) that portrays the visibility of signs. The CVS sign is located right by an intersection, which is a preferred placement.

Freestanding Site

A freestanding site is a marketing term given to those businesses that are located in isolated areas, unconnected to other retailers. Although, separate from other restaurants and stores, they're still placed in some vicinity to incoming business activity, therefore people who are shopping nearby are seen as earning potential. 

This Starbucks located in Itasca, IL is a perfect example of a freestanding site. It's not connected to any other buildings, it has it's own parking lot and it's easily accessible.

As attractive as this looks, there are downsides to this location. Firstly, since it's away from other stores, it won't be attracting customers who are trying to kill two birds with one stone. Secondly, they have higher occupancy costs because they don't have other retailers to share the common area maintenance costs, hence the bigger rent.

Target's Mini Power Perimeter

My local Target (Villa Park, IL) does a great job at filling up their outer walls with the main item that is associated with a supermarket's power perimeter: dairy.

As I was observing the products located along their walls in the produce section, I couldn't help but to notice that it fell short on other perishable items, such as baked goods and meat... However, these items were still close in proximity... Maybe the lack of these particular items along the wall helps us differentiate between supermarkets and supercenters.

Walgreen's Scrambled Merchandising

Walgreens is a specialty store that focuses on health and beauty products. Being a drugstore, one would assume that it would only carry prescription pharmaceuticals alongside other similar products; however, to appeal to larger groups of consumers, it's variety of merchandise goes beyond that.

During a recent visit, I spotted items that people would not typically associate with this type of retailer.. Such as games and toys.

Are they trying to appeal to the bored children whom parents bring in while waiting for their prescription to be filled?