Specialty Retailing- Coffee Shops

Presented by:- Reena Alva - 04

Vicky Barot- 06Presented to Dr. A. Kaul Rishabh Kapoor- 33

Nikunj Shah- 24(B)

Introduction

• Traditionally, India has been a tea loving country.• India has now become one of the fastest growing

coffee markets in the world. • Organized coffee retail business in India at over Rs 8

billion with the potential space for nearly 3,000 coffee retail outlets in India.

• According to industry sources, coffee consumption has shot up from 55,000 tonnes to 80,000 tonnes since the liberalisation of the economy in 1991.

Current state of some major players

CCD (Café Coffee Day).• It took the company nearly 6 years to reach the 35 store

mark.(Barista had become the market leader with more than 85 stores).

• Today they operate nearly 700 stores in India.

• Growth plan of opening 1,000 cafes by 2010 marking its presence across 102 Indian cities and also establishing 50 cafes in 10 foreign countries.

Barista• The problem with Barista was that it started a bit

ahead of its time and before it could mature it saw several changes in the ownership (Tata's -> Sterling -> Lavazza).

• Today it operates around 200 stores and seems to be back on track.

• They brought in international experts from Italy to design outlets/ambience and to train staff.

Costa Coffee

• British coffee retail chain Costa Coffee launched its outlet in New Delhi, becoming the first international coffee chain to start operations in India in September 2005.

• The chain is currently operational with 36 outlets and expanding aggressively to tap this potential market.

• Retail players like Reliance Retail and Shoppers Stop are also retailing coffee with their multi-products offering outlets like Reliance Timeout and Desi Café respectively.

Coffee Shop Branding with Decor and Furniture

Retail decor is extremely important for two reasons:

To establish value in the mind of consumers or potential consumers;

And To provide a space that supports your brand

experience.

• Consumers use visual cues to form their impression of retail brands and to anticipate the value of products and services, sometimes long before experiencing them firsthand.

• Numerous studies have shown a strong correlation between visual perception and taste, so retail decor can not only make a good first impression, but can arguably improve the perceived taste of beverages.

• There is no single model of how retail coffee shops must be designed, nor features that must be included in every circumstance.

• Every business should choose a retail format and design elements that project the brand’s unique statement (e.g. “We’re good,” “We’re fast,” or “We’re cheap”), while also creating a desirable environment for consumers that is not duplicated elsewhere.

• Using common elements like “comfy chairs,” artwork only creates brand confusion with thousands of similar businesses in markets across the country.

• The generic ubiquity of garage sale decor and its negative association with typical independent retail shops today can alone create a preconception of mediocre food and beverages in the mind of consumers that will hamper sales — regardless of the actual quality of what is served.

More than just a sip... !!!

More than just a sip... !!!

• Not just coffee - an ever increasing list of soft drink concoctions with snacks and mini-meals

• A happening beverage – From 175 in 2002 to more than 5000

STRATEGIES

• Stretching the brand

• 60% of the sales are of products other than coffee

• A venue to socialise, finalise business deals, conduct interviews, listen to music and read in

• Unaffected by consumption pattern

• Extending Network

• The advent of night-time work enterprises

• Youth migrating to cities

• Targeting the power of youth and their disposable income

Barista’s Bean

• Targeting college students in the age range of 16-20

• "catch them young" and induce "lifetime loyalty”

• Recreate the ambience and experience of a typical Italian espresso bar

• Had newspapers, magazines, guitars, board games

• Diluted its upmarket sheen

• "platforms on the go"

• Barista espresso bars, shop-in-shops and corner stores

CCD’s Cup

• Incorporates health foods like herb breads, sunflower seeds, multigrain breads and bran sandwiches

• Premium coffee, filters, mugs, and message T-shirts

• Marketing associations with youth-oriented brands like Levis, TVS, Airtel, AOL

• Affordability

• Well lit and respectable, yet informal

• Launch 25 café a month – Never be more than 5 minutes away from a CCD

Mocha’s Sip

• Focus on imported coffees and an upmarket clientele

• Few in Number

• Focus on knowledge building and management

• Rs 3 crore in human resource development Rs 8 crore on the development of new menu items every year

Developing Customer Relationship in your Coffee Shop

• You can create excellent customer relationship masters by focusing on 3 things:

* Your hiring process * Your training program * Your personal management style

HIRING PROCESS

• In the retail coffee business, your barista is the central key to your success

• The first thing to look for is brightness and a perfect fit into your company culture.

• 2 factors that a barista should possess1. Personality that suits the business:

-You can teach any potential barista coffee- making skills, company procedures and other chores, but you can't teach personality

2. Ability to work in a team:-Team concept is important when two

baristas working the same shift are interacting with each other and their customers in a confined space

TRAINING PROGRAM

• Concentrate on Customer Relationship Training:– Training program should not be focused solely on

professional drink-making techniques.– Should be focused on the Baristas interaction with

the customer

4 tips in barista customer relationship training

* Role-play to ensure everybody not only hears, but also practices engaging customer relationship marketing.

* Teach better listening skills and the ability to focus directly on each customer.

* Teach baristas to take personal ownership of customer concerns and needs.

* Train all staff to accept responsibility outside their assigned responsibilities.

MANAGEMENT STYLE

1. Making Happy Employees:• Many managers pay no attention to their

people, until they catch them doing something wrong

• If you focus more on the positive traits, it helps create huge momentum in the development process of your employees

• Positive interactions and experiences make for happy employees

• The simple formula here is – ‘Happy employees treat your customers like gold.’

2. Give the employees a sense of ownership

• Make them feel like they are critical to the success of your business

3. Celebrate success together

• Regularly reward your staff in personal and surprising ways for helping you run a profitable business

• Need not be monetary: It can be a sincere praise for a job well done, a special day off, or just a note or voicemail telling them how glad you are that they are on your team

Steps to Successful Coffee Merchandising

• From Small Coffee Shops to the Discovery of Espresso Machines.

• With 1000+ outlets the Big Giants have changed things even more.

• Retailers need to provide accessible, straightforward information

• The coffee store and merchandising will get benefitted from a Good cup of coffee – a product mix which is hot, fresh and stimulating.

• The staff should know every step of coffee story right from beans to cup………

• The Drinks Menu should be as simple as possible

• Merchandising beans is one of the most difficult aspects of the specialty coffee business.

• One of the great debates in specialty coffee retailing today is whether to emphasize origin coffees or to focus on proprietary blends.

• In coffee merchandising one of the best and most powerful tools you have at your disposal is the smell of coffee.

• Fine tune Pricing of Merchandises for achieving trade off between turnover & Margins.

• There is a layer of Artificial Merchandising that crowds out the basic Message

“ Great Coffee Sold Here”

INVENTORY CONTROL

Important Points for Specialty Coffee Retailer

• Know the customers well. The Business is based on trusting relationships that is built over time.

• The barista is the owner’s stand-in.

• Don’t be self driven, be customer driven.

• Have Industry Information as well.

• Customize your Menu

• Celebrate Every Employee’s success.

Thank you