Starbucks, Racial Bias And A Brand Death Wish

Sometimes I just can’t understand what the hell is wrong with people, and this incident at Starbucks is a particularly disturbing example. Sadly, it’s testimony to how far humanity has yet to go to shed prejudices and biases that stifle us from being a unified planet. Last week, a Starbucks manager in Philadelphia called 911 because two Black men, after being refused use of the bathroom, sat in the store to wait for a friend without making a purchase. The cops came and after a big disturbance they were handcuffed and arrested for trespassing. Hard to fucking believe.

The human side of this incident is a colossal tragedy that, in today’s day and age, should never happen. I’m not sure anything Starbucks does can make it right. As a humanity, we will recover, we will heal, and unfortunately, one day probably having to face it again. But for the brand, it is the worst thing that can happen and no PR spin can cover its ugliness or make it go away. It’s a brand death wish.

I mean, you’re Starbucks, for God’s sake. You’re selling a commodity for decidedly more that the other guy. Your true brand differentiator is not coffee or warmed scones, it’s your brand values, what you stand for, your beliefs and the experience people have when they come in to a Starbucks. That’s what defines you. A good Sumatra is only the price of entry. See, the experience IS the fulfillment of the brand promise. And that brand promise is delivered by your employees, ergo they ARE the brand.

It’s mystifying really, Starbucks has always been a socially conscious brand with progressive values, they’ve always stood for inclusion and equality. It’s a purpose driven brand and it’s how they connect with their customers, through things the matter. And these days, race matters, equality matters, diversity matters. And if those truly are the values of the brand, then leadership is responsible for ensuring all layers of management, from HR to team leaders to upper management are living, breathing and teaching these values for this is what connects the brand to the people. And in this, leadership failed. Seriously, it’s all you got ‘cause you can get a dark roast or latte for way less a Dunkin’s. 

This is the power of brand equity in its most intangible eloquence. You can’t put the value of a strong brand easily on the P&L but in this case, you can certainly feel the financial damage when brand equity hits the fan. Starbucks will close some 8000 stores, and, according to MarketWatch, will lose upwards of $12 million in revenue. We’ll just have to see how the stock reacts over time and if their market cap takes a hit. And of course, what effect it will have on GenxX and GenY, who are all pretty socially responsible and active; they’re gonna be pissed I’d guess. Unfortunately all this damage will never be provide enough restitution to make right what happened in Philadelphia. 

It’s a brand crisis that closing a bunch of stores for three hours can never fix. In fact, the whole gesture feels hollow because they’ve crushed our belief system for them. Starbucks’ purpose and values define the customer experiences and the customer experience is how the intangible brand value equity gets built, or in the case of Starbucks, destroyed. It speaks to a systemic issue festering in the place that is at the center of their brand — its culture. Their culture is infected with implicit racial bias and three hours of sensitivity training is just a joke. I will acknowledge the significant challenges of trying to align 175,000 employees with consistent a worldview but for the Starbucks brand, it has to be done. Every large consumer facing brand that lives in its customer experience has to. I take that back, every company has to.

So this 2018’s re-wiring of our perceptions of the Starbucks brand, the new narrative, the new normal for Starbucks. This is who they will be until they prove they are not. It’s left millions of dollars of communications wasted and set back many years of brand positioning trying to be more socially conscious after their 2015 Race Together debacle. Back then, the promotion was received with massive outrage by Black writers, journalists, and activists on Twitter and subsequently cancelled. If you ever questioned the power of the customer experience to fulfill a brand promise, you need look no further at this little lesson. At this point, even Howard Schultz’s claims of investing “in our people” and his “deep embarrassment” falls on deaf ears. His statement reads “This is not about training. This is about the love and compassion and commitment that we all need to have for the customer.” Seriously? You don’t get to say that now, the damage is already done.

On another note, this is a reflection of the challenges our global society is facing today and this sad acknowledgment is not lost on anyone. As a humanity we have to be better than that. The planet is too small and too fragile for anything else. Somehow, someway, we all have to come together. And for brands and businesses in these tenuous times? You can afford no missteps or you will be skewered. Starbucks’ brand equity and image took years and millions to build and only one misguided incident to destroy. That is how fragile brands can be. This is why they are managed, invested in and nurtured at all points of brand touch. We are a litigious society but also, maybe ironically, a forgiving one. Starbucks sales may well rebound but the damaged perceptions will take years to heal. We will think less of them for a long time.

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This article was originally published by BRANDThink, LLC, Purveyors of a uniquely capitalistic approach to brand strategy. Read more at https://www.brandthink.biz/blog/2018/4/19/starbucks-brand-death