Analysis of Key Strategies For 2007

Improve Customer Service

Although I did not spend a lot of time on the employee sales culture, from store to store the culture was uneven.  I was only acknowledged one time at the front door (Flagship).  I listened to several conversations and never heard an up sell pitch.  At Madison Park I listened to the Barista bad mouth the hats and not take an opportunity to sell the new drink.

Improve Merchandising With Emphasis On More New Products

In all the stores shopped, there was a consistent level of merchandise assortment. One free standing whole bean display plus on-wall coffee display.  The shelves are full of the merchandise shown at the last Board meeting.  There are several issues in the merchandise effort:

• Lack of price signs.
• No coffee price on merchandise at several stores.
• Ballard had no sign at all on bakery products.
• The counters have a tendency to be cluttered, with too many small items for pick up.
• The launch of Bellaccina had a great full floor sign, but no mention that this is a new product.
• And, during at least two staff conversations I over heard (Madison and Ballard), the staff members did not seem enthusiastic about the product.
• The merchandise shelf system on the walls looks tired and lacks impact.

None of the stores had any coffee quality story (except Flagship which had “six steps to a great cup of coffee”).

Increase Level of  Integrated Promotions and Marketing

Nothing was evident in this area with the launch of “Bellaccino” having a floor sign and employee hats but nothing else.  The K-cup promotion was the best single effort in the 11 stores shopped but only half of the stores had it signed right and half had not put up the signs.  The menu board picture elements were not consistent from store to store.  Store facilities improved through remodels, paint, and polish.

Good improvement – The new colors create a much cleaner store appeal and new menu boards are easier to read.

Launch of Bellaccino

The signs were up but no mention of new or launch.  Employees (2 conversations) seemed uninterested.  In three days of shopping, there were no samples for customers.

Conclusion

Positive:                          Stores look clean and not out of merchandise

Needs improvement:       Still no sign of a sales culture (up selling, sampling, energy)

Communicate all photo images (except Madison Park)

No community emphasis

No excitement for new products

No impact merchandising in any classification

Special Note                   Food: we now at least have fresh looking food in the case but we are a distant last in comparison to all other general coffee store competitors.

Prepared by John Buller

May 15, 2006