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09/04/2020
By
MJV Team

Third Place and the Starbucks empire: the user experience at the heart of strategy

In this article, you will understand what the ‘third place’ means and how Starbucks has made this philosophy an asset for their global success. Check it out!

‘Third Place’ existed long before Starbucks. Sociologist Ray Oldenburg coined the term in his book The Great Good Place (1989). He described why community settings like cafes, bars, and beauty salons are essential for social connections, inclusion, and democracy. 

Starbucks has now incorporated this philosophy into its retail design and business strategy. “We want our stores to be the third place,” their new policy states.

What is the third place?

The sociologist Ray Oldenburg argued that, for a healthy existence, citizens should live in a balance of three kingdoms: life at home, workplace, and even social places. The latter would be the third place.

In Oldenburg’s theory, while work is a formal and structured social experience and home is a private experience, the third place is more relaxed environments. Environments where people feel comfortable and return to again and again to socialize and enjoy the company of acquaintances and strangers.

A good third place is full of conversation and generates spontaneous relationships between people from different social and economic backgrounds – it is essential in building strong communities, creating empathy, and maintaining a vision of yourself as part of something bigger. 

Oldenburg saw these spaces shrink in the United States during the post-war decades, as residential areas – suburbs – became devoid of public meeting places, and lives became more competitive and private.

The third place can be churches, cafes, gyms, beauty salons, main streets, bars, breweries, bookstores, parks, community centers, and gift shops – cheap places where people get together, and life happens. In simple terms, they are the living room of a community.

Third Place and the Starbucks empire

When Starbucks – which started as an independent store in Seattle – began to expand in the 1980s, it tried to replicate European-style corner espresso bars, small counters where people stopped for a quick coffee. Then customers started asking for places to sit and more food options.

In the early 1990s, Starbucks relied heavily on Oldenburg’s third-place philosophy for its customer experience strategy. In 2002, in his book Celebrating the Third Place, Oldenburg classified the “popular coffee shop chain” as a facsimile of a third space, citing its “high volume and fast turnover operations that present an institutional environment at an intimate level.” 

The tone used by the theorist was a little ironic, since, at  “industrial” levels, the cafeteria chain bases its customer experience in the third place. He and several other thinkers consider it critical that the private sector should provide third-party spaces in cities since communities establish their own third space, and not through the push of a commercial expansionist.

In any case, the way Starbucks designs its stores, and its service serves as a “prosthesis” of the third place for medium and large cities, increasingly lacking in public spaces for congregating and socializing. 

How the third place promotes the consumer experience 

Considering Oldenburg’s theory and Starbucks’ successful business model, more and more, consumer/customer experience strategists consider the idea of the ​​third place, which includes the user experience, generally thought of in technological terms – for systems, applications, websites, etc. 

Below are a series of fronts in which the third place promotes the consumer experience.

Service

In the third place, the idea is to make customer service not only satisfactory but excellent. 

The level of possibilities for socialization and relaxation are high so that when a customer enters the commercial premises or the virtual space, they instantly feel relieved of the “mandatory environments” that they “need” to attend (work/school/home). 

Observation

There is no excellent experience without monitoring the actual behavior of customers/users. An excellent third place trains their teams based on active observation.

Starbucks has a policy of applying ethnography techniques to train its employees. That is, people learn by observing and practicing hands-on, receiving constant feedback from their customers. 

Empathy

Managers must answer the following question, “What would I like?” to transform their physical or virtual spaces into a third place for their consumers. 

“Walking a mile in the shoes” of users is part of the culture of enterprises that want to transform themselves into a third place and generate a superior experience for their customers.

Method

All this, of course, is achieved methodically. A third-place doesn’t happen overnight. To create a third place, companies like Starbucks use methods and practices like Design Thinking – a problem-solving process, rooted in empathy – and customer experience tactics.

Constant reinvention

Lastly, it is essential to point out that the third place is not static. They need to be continually evolving to seize the moment and keep up with social changes. Also, they must adapt to the particularities of each place where they are present.

In 2019, Starbucks announced that it would enter a cycle of changes to “reinvent” it’s positioning as a third place. Given the magnitude of its operation, it is estimated that investments will be millions worldwide. 

Just to skim the surface of this change: Starbucks has already started investing in drive-thru and deliveries, something that until recently was almost unthinkable. The third place is not necessarily fixed places; they are, above all, a philosophy, an organizational culture.

How about it, are you ready to turn your business into a third place? Is putting the user experience at the center of your strategy part of your company’s philosophy? To reframe this concept, we chose 12 technology and innovation trends that promise to transform business in 2020. Download our Trend Report now!

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