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The Starbucks Sound. Marketing music maybe isn't as simple as it used to be for Starbucks, as the coffee-chain's "customer base is ever-widening, reflecting an increasingly young, multiethnic, transclass mix," report Steven Gray and Ethan Smith in The Wall Street Journal. "Five years ago, about three percent of Starbucks customers were between the ages of 18 and 24, 16 percent were people of color, 78 percent had college degrees, and overall they had an annual income of $81,000. Today, however, about 13 percent of the company's customers are between 18 and 24, 37 percent are people of color, 56 percent are college graduates, and they earn, on average, $55,000 a year."
So, where it used to be (and maybe still is) that the "Starbucks Sound" is "moderately eclectic, often jazzy, and never noisy enough to disrupt a quiet cup of coffee," the retailer's carefully cultivated audio aesthetic is subject to change. Perhaps that's why the "Starbucks Sound" is now mixing the likes of Beck and Coldplay with Bob Dylan and Carole King. It also raises the possibility that while "Starbucks is perfectly attuned" to its current customer base, it may have a tough time adapting to "changing tastes and styles over the years." But for now, it seems the "Starbucks Sound" is a hit ... although the retailer doesn't disclose "revenue from CD sales," and CIBC World Markets estimates that Starbucks' CD sales account for "less than two percent" of "U.S. retail sales of $4.5 billion during fiscal year 2005."
However, "when Starbucks carries an album, its stores often account for 20 percent to 30 percent of the record's weekly sales, and sometimes as much as 50 percent." EMI Group says that when Starbucks distributes one of its releases, it is consistently among its "top four" retailers. The record companies also appreciate that Starbucks doesn't "return unsold merchandise, as traditional retailers do." In exchange, Starbucks extracts lower wholesale prices. Does it pass the savings along to its customers? Ha! The typical Starbucks customer is more than willing to pay "full freight" for a CD that can be purchased at a discount down the street and Starbucks is more than willing to accept the premium. The "Starbucks Sound," as it turns out, is "ka-ching."
Tim Manners, editor
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©2005 reveries.com |
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