Wednesday, June 18, 2008

Retail Memo: Inside the New Starbucks First of its Kind General Merchandise Outlet Store in Ontario, California

On Wednesday, June 11, Natural~Specialty Foods Memo columnist "The Insider" broke some news here about coffee retailing King Starbucks opening its first ever, new format, Starbucks Merchandise outlet store at the Ontario Mills Mall in Ontario (Southern), California near Los Angeles.
Today, Natural~Specialty Foods Memo's (NSFM) Southern California correspondent IFN visited the new Starbucks General Merchandise store, and with the many years of experience in retail merchandising IFN has, wrote this overview and review of the new Starbucks store and format, along with taking what we believe are the first photographs of the new general merchandise store.
Below is NSFM Southern California correspondent IFN's overview and what we also believe is the first review of Starbuck's new Merchandise outlet retail store.
Review of Starbucks Merchandise outlet store, Ontario Mills Mall, Ontario (Southern) California.
Natural~Specialty Foods Memo, Southern California correspondent
Here are my observations and review of the Starbucks General Merchandise Outlet.
Products: The store has a very limited range of sku's. They are selling mugs, coffee makers, espresso makers, plastic cups, plastic tumblers, kids journals, and CD's. Most of the mugs and cups were branded with Starbucks logo, but the coffee/espresso machines were recognizable national brands.
Overall, I'm guessing no more than 150 to 200 different items, including all the different color mugs and tumblers and audio CD's.
Food/Beverages: There wasn't a coffee bean in the place being sold...whole, ground or crushed.
Pricing: Everything appeared to be around 50% off the regular retail price with most of the merchandise ticketed showing the original price tags still on the products.

A massive upscale coffee-maker display fills the floor at the Starbucks GM outlet store in the Ontario Mills Mall. But where's the cross-merchandising tie-in of Starbucks whole bean and ground coffee. We suggest adding the coffee to the display, fresh though not out-of-code product, for an easy add-on sale. Incremental sales are good sales after all.
The following is some of the merchandise in the store:
>Delonghi Rialto Espresso machine...regular retail $1,800.....Outlet price $839.30
>I Love You Mug (looked like it was from Valentines Day).....regular retail $7.95....Outlet price $3.99
>Embossed Heart Mug (again looked like it was from Valentines day).....regular retail $7.95...Outlet price $2.99
>Starbuck Anniversary Mug ......regular retail $8.95.....Outlet Price $4.99
>Photo Frames......Regular retail $9.95....Outlet Price $5.99
>All CD's..............Regular retail..$16.95 to $22.95 .....Outlet Price $7.99 each.

The Starbucks GM outlet store is packed with Starbucks plastic tumblers with a straw; but where's the discount?
The one item that was prominently displayed in two places in the store was a Starbuck's Plastic Tumbler with Straw for outlet price $12.95. The odd thing is the regular retail sticker also was $12.95. So no bargain there.

The Starbuck's GM outlet store merchandises product using a combination of wood fixtures, pictured above, and massive, cut-case-type displays in the form of floor stacks.
Merchandising: The store is pretty bare bones. The fixtures they are using to display the products are natural wood and/or they are just stacking the product on top of each other utilizing the shipping cases the product came in. It appears they are just letting the merchandise speak for itself and have utilized the colors and shapes of the cups and mugs to grab the consumers' attention.
The store is located just a few doors away from a Virgin Record store, so I envision them taking some business away from them on the CD's but only if you are a Bob Dylan or Miles Davis fan. As you can imagine, there was an assortment of CD's you usually would find in a Starbucks, mostly mellow music. They might also take some business away on the household goods (mugs/espresso/coffee machines) from Bed, Bath and Beyond that's also located in the mall.

The Starbuck's outlet store is packed with CD's from the coffee retailer's old exclusive artist compact disk business. So that's where all those CD's went. We thought they had been sold.

The store wasn't very busy while I was there, but that's to be expected during the week. I think the store will do well during the 4th quarter, especially for those business associates that are hard to buy for. But personally I don't think I would want anyone sending me a collection of starbucks plastic ware (even if it comes with a straw).
A view of the brand new (opened Tuesday, June 16) Starbucks General Merchandise outlet store at the Ontario Mills Mall, Ontario, (Southern) California.
Natural~Specialty Foods Memo (NSFM) Editor's Note: As NFSM Southern California correspondent IFN mentioned in the review, traffic was a bit light at the new Starbucks General Merchandise Outlet store at the Ontario Mills Mall. However, since it just opened, we expect business will pick up a bit once shoppers discover it.
However, Pinky, who works at the just-opened Starbucks store, is a bit bored and wants more business for the store, as she writes on her Myspace page below:
Posted: Jun 12, 2008 4:33 PM
I don’t know if you California partners have heard, but we just opened up a merchandise outlet store in the Ontario Mills mall. We have items like tumblers, mugs, espresso machines, the new iced to-go cups, etc. on the cheap. All the cds and dvds are only $7.99! We just opened on Tuesday and sales are slowly picking up, but I’m still kinda bored. So that’s where you guys come in...come visit me!! We’re in neighborhood eight, by Saks Fifth Ave. See you all soon!
Starbucks should give Pinky a cash bonus, or at least a free Starbucks gift card, for her use of her Myspace page to help market the new Starbucks GM outlet store. Excellent use of social networking as a marketing tool Pinky.
NSFM thanks Southern California correspondent IFN for the excellent review and photographs.


Anonymous said...

My family and I went to the Starbucks Outlet and picked up a few things for the kids to entertain themselves on outings with the grandparents (journals and tumblers). I found some mugs and insulated tumblers for work, (can't microwave hot water in a tumbler for my tea). Plus my husband found some real cool CD's. Maybe after the holidays are over, I'll go back and stock up on the holiday stuff to give out next year.

Lilibeth A said...

wow i'm so jealous! cool place