Costa opens a brand new concept store with Starbucks to form a differentiation-oriented competition for cafes.

Core tip: this year, the total number of Costa stores in China is 344, and its competitor Starbucks has opened more than 1700 stores. Six years ago, Costa opened stores 2.5 times faster in Beijing alone than Starbucks, and Bosmiao, then president of Costa Asia, claimed that "2500 stores would be opened by 2018".

From a close match to nearly 1400 stores behind Starbucks (feature Reading), Costa (feature Reading) is not reconciled.

In its ninth year in China, Costa decided not to keep a low profile.

This year, Costa has a total of 344 stores in China, and its rival Starbucks has opened more than 1700 stores. Six years ago, Costa opened stores 2.5 times faster in Beijing alone than Starbucks, and Bosmiao, then president of Costa Asia, claimed that "2500 stores would be opened by 2018".

This forces it to start thinking about what went wrong.

On November 4, the first store opened by Costa on East Nanjing Road in Shanghai was redesigned and renovated to reopen in the image of a brand new concept store. The new decoration style changed the classic Costa impression formed by the matching of wood color and red wall paint in the past, while the use of light green squares and lighter log materials constructed the metope appearance of the new store, and the white grid seats with more lines and modern feeling were moved in.

"authentic coffee from England, which is something we want to emphasize now." Liang Yuyi, who joined Costa as managing director of Asia in 2014, told China Business Weekly.

Originally, Costa and its rivals had a similar experience. In the mode of operation, both sides adopt the safe expansion mode of direct operation, and also seek long-term cooperative relations with local partners.

Number of stores of different brands in Chinese coffee market

In the early days of entering the Chinese market, Costa and Starbucks regarded themselves as the representative brands of English coffee and American coffee respectively. In first-tier cities, except for the different colors of store decoration, Costa and Starbucks are imported chain coffee brands. In the perception of mass consumers, Costa is to Starbucks, similar to Pepsi to Coca-Cola and McDonald's to KFC.

With the expansion and strategy adjustment, Starbucks has no longer deliberately stressed that it is American coffee, and the regional attribute has been weakened. Now, Starbucks represents a way of life.

Costa clerks have been experiencing an awkward conversation all the time. When consumers say "have a matcha latte" when they order, they always have to correct "Sorry, we sell green tea lattes" over and over again. It was not until nearly a year ago that Costa quietly rewrote "green tea" on the menu to "matcha".

It realized that it had to jump out and renew and strengthen its brand identity.

Previously, Costa marked its Chinese company name: Kashijia on LOGO stores in many non-first-tier cities-to highlight the authentic coffee tradition. This kind of "too hard" approach will more or less blur Costa's brand recognition.

Today, the new Costa concept store has been added to a large number of details of classic British cafes.

To retest the potential of the Chinese market, Costa launched a limited number of drinks for the Chinese market for the first time in February. The original sales plan was two months, but unexpectedly, almost all of them sold out in two weeks, and even some stores in prime locations sold out in just a few days. This result strengthens the confidence of Costa management in the market.

In order to adapt to the changing preferences of Chinese consumers, Costa has accelerated the frequency of developing and supplying new products to once a month.

Three months later, Costa launched three restricted drinks in the Chinese market with the help of the theme of the Sino-British Culture year. These three drinks correspond to English literature, such as Cambridge Lemon, which was inspired by the British Academy classic party cocktail, to remind consumers of Xu Zhimo's "Farewell to Cambridge", and the sales feedback once again exceeded Costa's expectations.

One judgment given by Ms Liang is that the Chinese market is becoming more and more complex. "as the market begins to become more and more mature and many Korean coffee brands are focused on entering, our challenges in product taste, service and innovation are becoming more and more serious. But a retailer must satisfy its consumers unconditionally. " He said. Costa has made up his mind.

In order to adapt to the changing preferences of Chinese consumers, Costa has accelerated the frequency of developing and supplying new products to once a month. This summer, Costa developed a total of 13 new drinks. According to the early consumer research and supplier feedback, Costa first formed a variety of imaginable product concepts, and then took 3 to 10 months to adjust and launch.

After the launch of the new product, there is still a two-month "testing period", and Costa will decide whether to take it offline and replace it with another new product based on the sales feedback of the store.

Costa is trying to redefine its brand value. One measure is whether the product allows consumers to take out their phones to take pictures and share them with ta friends.

In April, Costa launched an improved version of Victoria Sponge Cake, one of the most popular desserts in Costa stores, which retains its original British look but combines strawberries and cream that Chinese consumers love. "the traditional British aristocratic decoration environment, in line with the balance of product taste, this kind of 'mixing' is the selling point we are trying to create." Liang Yushi explained to China Business Weekly.

Costa began to pay more attention to seasons and festivals than ever before. "Yuanyang Coffee" is a new drink that Costa plans to promote during the Christmas season, which combines the dual tastes of coffee from Britain and Earl Grey Tea. In the summer, Costa launched "Shake Coffee", which imitates the bartender's practice of putting coffee into a special shaker, adding ice and shaking a cup of special coffee.

To enhance consumers' coffee-tasting experience, Liang and his team set desserts for each type of coffee. Cream coffee, launched this spring and summer, is set to go with banana and strawberry-flavored desserts. According to the preferences of consumers in different regions, Costa sells the same products in different regions with different flavors, such as different sauces for the same sandwich. For those classic core products that consumers continue to love, such as Panini and Tira Misu, Costa changes the cup containing pastry and changes its shape every once in a while.

All of this is to sell more coffee-not desserts or snacks. Starbucks, by contrast, sells everything it can sell, whether it's a Starbucks bear, a Christmas red cup full of tricks, or a membership card.

Segment share of Chinese coffee market (by sales)

As a hot "lifestyle" company in the world, what Starbucks does best is to export a "concept of life" it advocates, sometimes even a good-sounding term.

A regular customer walked into the familiar Starbucks and was just about to order a latte when the clerk quickly pinched the opportunity and asked, "would you like to try our latest product, Furebai?" He looked up at the blackboard behind the clerk. Under the three Chinese characters, there was a line of explanation for Furebai.

He began to hesitate. Would you like to try a drink? At this time, the clerk once again seized the opportunity to throw several questions to him: whether to go with the latest Christmas cheesecake; if the cup shape, the two can be bought together at a discount; is there a star card that can be scored?

If he says he doesn't or doesn't have it, the other person doesn't forget to remind him that he has a new membership card to buy or download Starbucks App.

There is no coffee shop brand that knows how to hold down consumers better than Starbucks. Its competitors want to be it, and Costa is no exception.

Shortly after Starbucks launched Fragrance White, Costa renamed the same coffee product "mellow White" and added it to the new menu. According to Liang Yusheng, Costa will also launch intensive membership award programs and cup-like derivatives.

"the joint launch of food and beverages with other brands is also a crucial strategy, and the current coffee market requires coffee shops to seek variety. If you can provide your own coffee or hold free lectures and other related experience activities, it will further enhance consumers' brand identity and enhance stickiness. " Esther Lau, an analyst at Mintel Research, a British market research firm, told China Business Weekly.

According to public data currently monitored by market research firm Mintel, Starbucks, which specializes in developing derivatives, grew its market share in China by 45% from 2012 to 2013, while Costa grew by 28.9% over the same period.

Even if it wants to catch up with its rivals, Costa doesn't see the need to make too many compromises. For a long time, one of the major complaints of consumers about Costa is that the waiting time is too long. But Costa always adheres to the semi-automatic and semi-handmade way of making coffee-a key link that distinguishes it from Starbucks.

"providing high-quality freshly ground coffee and regularly updating menus have become two standard requirements to meet the needs of Chinese consumers." Esther Lau said.

Costa global revenue and profit

Sales in Asia reached 85.7 million pounds (823 million yuan) in the 2014-2015 fiscal year, up 48.2 percent from a year earlier, according to Costa.

Semi-handmade coffee means that the final taste of coffee depends on the craftsmanship of baristas in each store. If a consumer studies coffee, he is likely to drink different flavors of the same coffee in different stores.

In order to save as much time as possible without sacrificing the taste, Costa has set up a coffee making standard called "Costa Operation Excellent". To this end, Costa holds a global barista competition every year to revise and update these standards.

A barista is selected from every store in the world to enter the competition, and the requirement is to produce the most espresso within 30 minutes according to specific standards. "the soul of coffee is espresso, a good espresso must maintain the perfect gold ring and grease, we have strict requirements for these details." Liang Yuxing said. The winner of the global finals will enter the management department to become a coffee designer, leading team training and imparting skills to other baristas.

Unlike Starbucks' standardised automated coffee making process, Costa must use a lot of manpower to ensure that coffee making and taste controls in stores are stable and in place.

Within Costa, there is a mysterious independent department responsible for making round-the-clock trips to stores around the world to monitor the level of coffee production.

Every day, they "dress up" like Michelin appraisers and walk into a store like ordinary consumers. Shop assistants often don't recognize them. They order a cup of coffee, silently observe and test the barista's cooking skills, rate how he grinds the beans, brew the beans, how much milk he adds, the final appearance and taste, and then give feedback to the company.

Sometimes, they will reveal their identity and direct guidance. These tasters tend to be baristas with more experience, or people who have in-depth research on coffee. "We never notify the store in advance, and we carry out surprise inspections all year round, because it is not a mechanized procedure, so this kind of monitoring is the meaning of all work." Liang Yuxing said.

This means that Costa costs more time and manpower than its competitors to sell a cup of coffee. Although Costa China officially claims that the total number of stores in China will grow to about 900 by 2020, if Costa continues to maintain this uniqueness, it is bound to be a hindrance to the chain's accelerated expansion.

Today, the new Costa concept store has been added to a large number of details of classic British cafes.

To some extent, Costa has been "selling old" at all costs. When its two Italian founders founded Costa, they set the goal of opening a coffee shop to create a small local community, and then promote the coffee culture and experience. You will find that in the new concept store on Nanjing East Road, the splicing between tables is composed of at least 4 people, and the seating of 6 or 8 people is also a more common table setting.

According to analyst Esther Lau, small lectures, ad hoc meetings, training and other community activities have become a trend, coffee shops should follow this trend and make changes. The downside, however, is the decline in the turnaround rate. Compared with Starbucks, Costa lacks a row of single seats.

Both Starbucks and Costa need to form a clear and differentiated impression in the minds of consumers. In our analysis, Starbucks is fast leisure-oriented, while Costa is business-oriented coffee shop. " Esther Lau said.

Even if there are 100 Costa stores in a place, consumers will still choose the one they are familiar with. This is where Costa is different from other brands. " What Liang Yukun means is that a store employee can easily call out the name of a regular customer, remember his preferences, provide taste customization service, add more milk or syrup, and the regular customer will feel relaxed when buying a cup of coffee. This is also similar to Starbucks' partner.

But Costa's target consumers have changed. Starbucks mainly attracts young people, perhaps students or company people under the age of 35. In the past, Costa targeted its target audience as older consumers than Starbucks, and more likely to be male customers who prefer comfort and quiet. Now, this range is extended to people who have a higher demand for coffee, rather than coffee beginners or beginners. Factors such as age and gender are completely excluded. Costa has become more clear about the business it runs.

Costa has too much work to do now. Since last year, the marketing department of Costa has expanded from 3 to more than 10 people, while other departments are constantly receiving and tapping talents in catering and other related fields. At the end of November, Costa is also preparing to formally establish a dedicated peripheral product development department to build a larger corporate structure.

According to the introduction of Zhang Jiaqing, manager of Costa retail marketing department, from product development, peripheral product research and development, product design, store decoration design to advertising marketing, all belong to the marketing department. As a consumer-oriented company, it is important to have employees of different ages, hobbies and moments. Each new product R & D is accomplished by a team of employees from different departments.

In order to ensure that feedback from front-line stores can reach the management in time, Liang Yuxing held a round-table coffee meeting with the store manager once a week. Themes are constantly changing, from social media to product updates. In Costa's new store, Costa's home-made mineral water is placed on every table for free. The idea comes from one of many managers' meetings. A manager told Liang Yuyi, "A guest bought a cup of coffee. I handed him a bottle of pure water. He was very grateful to me."

"I should be grateful to him for telling me about it." Liang Yuxing said. He then personally pinned a button to the manager's shirt collar-the more buttons, the better the employee's service.

"but this recognition of employees should not just come from the company." Liang Yusheng found that Costa was too low-key in marketing in the past. Apart from the low frequency of advertising, there were too few in-store activities to attract consumers. At least compared with its rival Starbucks, it is negligible.

"I have to take the initiative and stop being so shy." Liang Yushi said.

When coffee appears frequently in our daily life, can you feel the differences between different brands? Today's choices are full of personalized factors. Marketing is also one of the reasons that influence the choice. Business-oriented coffee shop is Costa's self-perception, what do you think?

Source: win the business network