10 Retailing Lessons from Starbucks

Know the customer’s name – When the barista serves your iced coffee, she calls out your name. This simple gesture goes a long way in retaining customers. Have employees ask customers open-ended questions so they can get a better understanding of what brought the customer into the store and how they can assist in their shopping experience.
Know the target market – Starbucks furnishes its locations with cozy couches and tables, providing a homey place for students to write class papers or to have meetings. Knowing your customers is a key in providing quality, unmatchable service. If a majority of your customers are young, busy families, a website with a "pick-up at store" capability will allow them to be busy and still get all the home improvement products they need.
Changed the way we define coffee shop – Starbucks changed the definition of coffee shop from a store that only serves coffee to a hangout and meeting place that serves drinks and food, inviting customers to stay a while with comfy seating, electrical outlets and phone charging stations. Go beyond the typical home improvement store experience by hosting fun events, teaching classes, getting involved with other local retailers and changing the way home improvement store is defined.
Treat employees well – Starbucks knows the value in retaining employees, so it provides free online college courses for employees, and those who work 20-plus hours are eligible for health insurance. Knowledgeable employees who provide exceptional customer service are what independent home improvement retailers pride themselves on. Adding benefits will encourage employees to work harder and provide them a reason to stay longer.
Tailored product offering with seasonal choices – Starbucks has its core products consisting of iced coffees and mocha lattes, but as the weather changes, seasonal items are introduced such as the famous Pumpkin Spice Latte. It is important that retailers fully understand the product demand that changing seasons and weather bring. If it is raining in the morning, put a dump bin of umbrellas at the front of the store, reminding customers that they left their umbrella at home and will need one throughout the day.
Knowledgeable employees – Starbucks employees undergo 30 hours of training and can serve 87,000 drink combinations. Starbucks understands the value of employee training and ensures employees can meet their customers’ needs. The North American Retail Hardware Association found that the No. 1 cause of employee dissatisfaction in a home improvement retailing job is lack of training. Invest in an employee training program that not only provides product knowledge, but also selling tools to fully equip new hires for the sales floor.
Integrate online and in-store experiences – Starbucks has more than 7 million mobile transactions per week in the U.S., according to its January earnings call. Company leaders know a majority of its customers are tech savvy and they have adapted payment options to cater to customers. Even if a high-end website with shopping cart capabilities and a search bar is not an option, making a website using a simple tool such as WordPress is beneficial. The basic website can provide directions, store hours, weekly promotions and a history of the store.
Keeping up with the trends – Starbucks knows what the trends are and was responsive by acquiring Evolution Juice. The company saw the potential in the juicing/smoothie market, so it expanded its product offering to reflect that trend. Keep an eye out for industry research and market trends, then adapt your inventory to accommodate those trends. Talk with other independent retailers to see what categories have experienced growth for them or what niche products are providing a great return on investment.
Loyalty program – According to Starbuck’s 2013 annual report, 7 million people are active My Starbucks Rewards members in the United States, with 1 in 3 transactions being paid with a Starbucks Card. Loyalty programs are a great way to get customers in-store and track their shopping patterns. Having a loyal following provides you with brand advocates and make up the majority of your sales. The 80/20 rule indicates that 80 percent of sales come from 20 percent of your customers, and often those 20 percent of customers are or would like to be loyalty members.
Growing Responsibly – Starbucks gives back to the community through its goal of employees performing 1 million hours of community service each year. Also, Starbucks ensures that 95% of its coffee meets C.A.F.E. practices standard, serving a globally responsible product. As a local retailer, it is extremely important to get involved in your community.