ISS 2020 Vision Future of Service Management | Page 76

Coffee: a commodity that becomes an
experience and then a transformation
Coffee is one of the most commoditized items – second only to petroleum in traded value. 101
It is also an example of a commodity that has progressed in economic value to now guide
transformations for the end-user. As market offerings become commoditized, more value
is extracted through a process of customization. Coffee beans represent the commodity;
packaged coffee represents the good; brewed coffee represents the service; and “Starbucks”
represents the staged experience – each stage building off the previous. Starbucks has been
very successful in setting a standard in staging high quality user experiences by creating an
inviting, authentic mood and atmosphere as part of the coffee consumption service. 102
Starbucks is a global giant with over 24,000 outlets spanning 70 countries and revenues
surpassing $16 billion in 2016. 103 Their baristas are expected to live up to high standards.
In order to differentiate the company from other coffee chains, it delivers. It delivers ‘the
Starbucks experience’ to its customers. Rules include that if an espresso has remained on the
counter unmixed for longer than 10 seconds it must be immediately discarded. 104
This, however, is not the final stage in the progression of economic value. The next stage
is the transformative process where new coffee academies and coffee shops train amateur
enthusiasts and others to learn how to consistently make great cups of coffee. These
academies not only provide an experience, they impart new knowledge and skills for their
customers – they create experiences so highly personalized and impactful that users cannot
help but walk away claiming it as a life-changing experience. 102
101 Henry H., What A Coffee Shop Can Teach You About Finding Loyal Customers, FastCompany, 2014.
102 CIFS, Trends for Tomorrow, Members’ Report 3, 2013.
103 Starbucks, 2016.
104 Chole C., Starbucks’ New Business Model, The Market Mogul, 2015.
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