John Boccuzzi, Jr.

Starbucks a Great Testing Ground for Grocery Sales

August 20, 2010

FROM RETAILWIRE:
When Starbucks introduces a product into grocery stores it already knows whether the item can generate repeat purchases because it has first tested those items in its own stores. Does Starbucks have an advantage over other food and beverage brands when it comes to new product launches in grocery stores?      [more...]

Starbucks is a great testing ground for new items and I like what Schultz is doing. In fact, I could see Starbucks testing products for National Brands that don't compete with their brands. As long as the target consumer is similar to the target Starbucks consumer it should work. Starbucks could run these tests for National Brands for a fee and then provide results. If the pre-test with Starbucks eliminates or greatly reduces new item introduction fees with retailers it would be a very attractive option for National Brands. Not every item would work, but items including crackers, cookies, cereal, energy bars and some HBC items would. By building consumer awareness through sales at Starbucks stores I believe you could convert consumers to purchase these items in grocery stores. Even a coupon follow up program to help drive conversion from Starbucks to grocery would be very interesting. This has the potential of being another income opportunity for Starbucks and added value for loyal Starbucks consumers. As long as they control these tests and don't clutter the store, I am very interested in seeing this idea expand.

The rewards program at both Grocery and Starbucks is very attractive as long as they can find a way to work with Grocery and their POS systems to handle the savings. That always seems to be the challenge. Maybe it is a Catalina coupon that the consumer redeems at Starbucks or on their next shopping trip to that retailer.