Disney created some controversy when it introduced Starbucks into its theme parks in thelast two years. Some are thrilled that their favorite coffee brand is available in the parks, while others feel that putting Starbucks in the parks ruins the Disney brand, particularly on Main Street, U.S.A., where the stores and dining establishments it replaced were more quaint and familiar.
Rather than simply discuss the pros and cons of that debate, let me look at why I think Starbucks works, and why I think it works at Disney California Adventure but not at at the Magic Kingdom. And I should say up front I don't drink coffee.
Some years ago, B. Joseph Pine II and James H. Gilmore wrote a book called The Experience Economy, which discusses four different economic activities. Let me apply the development of Starbucks and the Disney theme parks using their model:
- Commodities – In the time of Main Street, U.S.A., there was a market house where you would go and buy coffee beans by the pound, then take them home and grind them up. It was no more than a penny or two to buy enough beans to make yourself a cup of coffee.
- Products – Someone came along a few years later and realized that they could make a little more money as a store if they ground the beans and then sold them in a can. Soon the local market had cans of fresh ground coffee. It costs a few pennies more per cup, but it was affordable.
- Service – Along came the coffee shop. Why not just make coffee for folks and sell it to them? For many years a dime bought you a cup of coffee at the local diner. Today you can get it for about a dollar at Seven Eleven.
- Experience – Then came Starbucks. Outside the gates of Walt Disney World, a Venti Caramel Ribbon Crunch Frappuccino costs you $4.95. Add organic soymilk for 59 cents. Now the soymilk addition is more than what a cup of coffee cost a few years back.
Why does that succeed?
I think that in one's hometown, the experience of being in a Starbucks today is like being visiting your local tavern years ago. It was the place to hang out and to enjoy the company of friends and associates.
Starbucks has come to replace Cheers (the bar from the 1980s TV sitcom), where "everybody knows your name." Starbucks became a hangout and one of the first places you could bring your laptop and use the internet. I remember visiting one in a chic Downtown DC location once and having trouble a seat because so many people lingered for hours. It was the place for locals to meet up. From aroma to couches, people gladly paid for the experience of being at Starbucks. After all, it was simply cool to be at Starbucks. They even bought up the coffee-related merchandise. So successful was Starbucks that soon you could find one anywhere—from a strip mall to a palatial hotel in Dubai. So why not Disney?
The first Starbucks I visited at Disney was in Disney California Adventure park in Anaheim in the form of Fiddler, Fifer & Practical Cafe. Not only was the store new, but so was the entire boulevard. Disney had just made a major remodel in the form Buena Vista Street.. As an eatery at the entrance to the park, it was very spacious. Two major blocks of space were dedicated to queuing up for coffee and other Starbucks-branded foods. But the really great thing was the amount of space available for patrons to grab a seat and enjoy.
And there was even more space outside if you enjoyed the weather—something California does well. I imagined that with the huge number of annual passholders, this would be the place to meet up with friends before heading into the park. I could see that it created an experience all of its own—not quite Starbucks and not quite Disney—but a unique place that you might have visited in Silver Lake, the thematic setting of this locale.
The Starbucks at Disney California Adventure has the advantage of a nice patio area overlooking the plaza, fountain and Carthay Circle Theater. It also has wonderful California weather. Photo by J. Jeff Kober.
So I was curious as to what would happen at the Magic Kingdom. I never thought the use of space in the previous bakery was well thought out. There was a hole in the middle of the room, occupied by circular table with drinks. The line for everyone was held up by those wanting specialty coffee drinks. But there was an adjacent seating area, and that space was always crammed. People were always trying to find some place to sit. It was the only indoor casual seating space on Main Street U.S.A. and it was premium real estate—especially from the heat, humidity, or a lightning storm.
The new Starbucks got rid of all that. Yes, it is themed to Main Street U.S.A. And yes, it carries all of the food and drinks associated with Starbucks. But there is no more indoor seating. Now, the entire space is focused on queueing guests for getting their orders before dumping them back out on the street to fend for themselves. Oh... and that same frappucino that cost you $4.99 outside the gates is $5.49 here.
Of course there is no real annual passholder crowd that meets up like you would in California. Although there are local passholders in Orlando, it's a different vibe. This Starbucks here really does little more than what a Starbucks does at the airport. You purchase convenience and a product with a taste you prefer, but you aren't buying an experience. And that's unfortunate, because while I can't evaluate the quality of the coffee, I am left to wonder whether it's worth the inflated price.
What validates my thinking is that the Tomorrowland Terrace at the Magic Kingdom, which in the past wasn't even open most days let alone for breakfast, has been opened all summer long selling coffee at a slightly more reasonable price, offering other food products you don't typically get at a Starbucks, and providing what really probably matters most—seating. All with an incredible view of Cinderella Castle. At times, I've seen more of a crowd there than at the new Starbucks.
The same problem happens in reverse at Ghirardelli's. The Ghirardelli at Downtown Disney in Walt Disney World is packed, and you can't find a seat to save your soul. My experience with the one in Disney California Adventure that I visited last year was the opposite. People lined up, but not in the same way you get at Downtown Disney. It's a much more beautiful store, but there really isn't much seating in the store, or even right outside of it. The experience at DCA has yet to really be defined.
I can see this play out in the new Starbucks at Epcot. The old Fountain View ice cream store had a small footprint. The new Starbucks will likely take up all the space just in the queuing and purchasing of Starbucks product. I can see people taking their Starbucks and walking a few feet forward into the Coca-Cola Cool Place just to be able to put down their coffee and finish their muffin on one of their cocktail-style tables. The smart thing would be to create shaded, outdoor sitting where you could comfortably stop, sit, and enjoy the "fountain view."
It isn't about the importance of chairs and tables, but what happens at the chairs and tables—in that setting. It's about the interactivity, the conversation, the being there. It's a little like the checkers tables that used to be in the Market House. Why would you spend nearly $100 to get into the park, only to spend your time playing checkers? Because of the experience and the memories it creates; what happens between the grandchild and grandparent while they're playing checkers. \Of course, all of this is ironic because the new Starbucks at Disneyland has taken over the old Market House, where in the center of the room you played checkers. Given the other Disney-Starbucks designs, the center of the room will now likely be a queue.
It's also comparable to buying a souvenir Mickey Mouse shirt. Do you remember your first one at Disneyland or Walt Disney World, saving it for special occasions? Do you attach a certain memory to that experience? It's not the same if you buy that shirt at the Walmart down the street from Walt Disney World. You certainly get better savings, but the shirt doesn't quite carry the memory of the experience.
This happens all throughout anyone's business. Are you selling a commodity, a product, a service or experience?
The good news is that the more you sell the experience, the greater your profit. And that makes good sense—or cents.
What do you think? Why do you go to Starbucks? Have you been to the ones in the parks? How do they compare? What is your experience—and was it truly an experience?