Well, I opened it up to find out what was inside during this holiday season… and to my surprise it was a marketing gimmick with three Starbucks Double Shots inside.  Something about how I can get fast service from AT&T, when I buy my new HP computer, I don’t know I didn’t read any of the packaging.  Just took out the Double Shots before deciding that this is something that I could and should blog about.

This seems like a very expensive mailing, but maybe I fit the right demographic.  I have purchased an HP computer before (7 years ago), I do have a large phone bill sent to me monthly from AT&T, and could it be possible for them to purchase my name from when I registered my Starbucks card?  Well, I’m not going to be buying an HP laptop anytime soon (although, they do recommend Business  Vista) but I will definitley enjoy the more than $5 in free Starbucks drinks.

If you want to see the pics of the box being opened check out the rest of the entry.

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Some Seattle natives may remember when Tully’s in their continue quest to find something, anything, that will help lure customers away from Starbucks had the 3:21 special.  It was a promotion that would give you between 33% and 50% off of your drink between 3:21 and 3:51.  I loved the promotion, and in turn became a big fan of the Tully’s Espresso Oreo Shake (still highly recommended), however I felt it was a gimmick.  I also felt that it was to early in the day to add new customers and what it was in fact doing was cutting into their margins during a time in the day where people are needing a quick pick me up from the after lunch lull.  Their thinking, I take it, was to get people in the mind set that you do in fact need that afternoon coffee everyday.  It did help engrain that thinking, but once they stopped the offer, I returned to Starbucks for my coffee needs.

A happy hour though in its most true sense could really drive additional business into Starbucks.  Imagine a happy hour from 5pm until 6:30.  You aren’t cannibalizing the post dinner group and you aren’t cutting into the margins on the afternoon coffee break from work crowd.  If you implemented a more open atmosphere with the Baristas (some would shine, others would not) where the Baristas could become more like your local bartenders and the patrons could find a new place to interact after work.  I go to happy hours fairly frequently and usually more than the food or the drink the place is decided upon based on price, atmosphere, and location.  Starbucks has the locations (any location) down, and if they were to offer happy hour prices and a more open barista atmosphere along with different music there would be the other two deciding factors.

Howard Schultz founded Starbucks after a trip to Italy where he saw how much people were interacting in the cafes there.  This could rejuvenate the cafe environment in the US as well as increase profits for Starbucks.  In my opinion, after the lackluster performance and the many competitors who cannot offer the atmosphere that Starbucks can, it is now time to create the new Starbucks Happy Hour.

What do you think, is it weird that Starbucks, a giant corporation is selling a Grateful Dead album?

[Sidenote: I bet I have motivated at least one person to go down to Starbucks and buy the album as soon as they read this post.  Starbucks, you're welcome.]

I wish that I had my book "Pour Your Heart Into It" which talks about how Starbucks became the empire it is today (or in ‘99 at least) and gives alot of background on both Howard Schultz and the company itself.  One part in the book that struck a chord with me was when Starbucks wanted to introduce non-fat milk as an option.  Howard would not budge on even offering non-fat as an option until he went in and observed a store and how many people asked for non-fat milk while wearing workout clothes.  He still said that they would not change the default milk from whole because whole milk is what lattes are supposed to be made from (through his experiences in Italy).  Probably 10 years (I can’t fact check without my book) after they introduced non-fat, 1%, 2%, and even breve as options they are now changing their default drink to be 2% rather than whole.

Isn’t this changing the latte from what is supposed to be?  Isn’t this changing the entire coffee and Starbucks experience?  For something that took Howard so long to budge on (to even have an option) it is dissapointing to see them change their core offering.  What I really want to know is why?

Is it because they are trying to stop people from gaining weight?  They fased out all of the trans-fats in their pastry case and offer many more "reduced fat" options in the case now.  Could this be due to the fact that McDonalds was recently sued for the weight problem we have in America?  I would hate this to be the case as it’s not Starbucks, or McDonalds fault for people gaining weight.

Or is it this…the stock hitting an 18 month low.  It has rallied some in the past month, but on June 22 it hit $25.54 and had been on the decline for about a year and a half.  I have a feeling that this is the reason for the change and it is sad to see.  I know the pressures of being a public company and especially of a company that has performed so well are high, but it should not change who you are as a company.  Something that Howard thought was so key to the company was maintaining the consistent coffee and latte experience that he had in Italy.  2% milk is cheaper than whole milk so this will help with the profit margin signficantly.  This paired with the increase in prices starting next week (the second increase in a year) should result in some good numbers next quarter and next year. 

Now as much as I wish they weren’t changing for principal reasons, I think I’m going to buy some Starbucks stock tomorrow after I just wrote this post.