It was the best of times, it was the worst of times... Those immortal words could sum up my recent experience at two local cafés. Due to the nature of my work, I often find myself in a café before, during and after client meetings. If you think about a café as a shop that sells coffee you’d be completely off the mark.
In my latest article, I compare the customer experience of two cafes that sell the same “product”. As you read, I ask you to step back from judgement and see if you can distil what is going here? Next, I'll look more broadly as to what's happening in the café sector and what can we learn from that industry. Nowadays, it's about achieving a customer's "great expectations". The Boomers are getting more and more expectant. What in the Dickens is going on!?!
Cafe One is a local suburban bakery that has extended into a full-service café. I sat down and noticed a power-point right next to my table. I ordered a coffee, plugged in my laptop and started reading some emails. After about 20 minutes, I went outside to take a quick phone call. When I returned to my table, I noticed my laptop had been unplugged from the power-point. Next, the owner came to my table and berated me for using their power. I apologised and offered to pay for the power. He politely refused. I left the café and left a tip on the table to cover any power costs.
Cafe Two is also a large café with a wide menu choice and lots of seating. This time I knew my battery was already running low. So I asked one of the wait staff if there was a table near a power-point. The server scanned the room and couldn’t find a convenient power source. Out of the blue, I see him return with a 20-metre extension lead to reach the closest power-point, and with a power-board to connect both my laptop and my phone if I needed it. Stay as long as you want, he said.
MY TAKE ON THESE SITUATIONS
Both had different responses to something that was essentially my problem. So who’s right and who’s wrong? And is that even the right question to ask?
The better question might be: what is each business trying to achieve? Remember, from the outset, they both sell a similar product in a competitive context. The first café owner appeared to be focused on efficiency by keeping running costs low to maintain margins (i.e. they are volume-driven). The latter's primary focus was customer experience and providing added value. Both are trying to survive but in different ways.
If we take a broader look, what else can we see and learn from the café industry and how it is evolving - particularly for its customers that are more mobile than ever.
HOW AN INDUSTRY EVOLVES
It’s not always about the relationship between the length of time people stay in a cafe and how much they spend. What are people buying while there? Here are four innovative business ideas from shops that purportedly sell coffee.
Cafés are charging by the minute! Ziferblat in London is the world's first pay per minute cafe, meeting room, coworking and events space. Everything is free except the time you spend there. Hold my coffee! What?!?
The Cowork Café in the US is a casual, comfortable, and convenient place to work with the benefit of café service and a collaborative community. CoworkCafe is a revenue-sharing platform concept for food service establishments and other unique spaces to make money from their existing space. This concept is trying to generate additional revenue opportunities for coffee shops to cater specifically to mobile workers (like me).
Café owners are switching off free wifi to create a better ambience to encourage their patrons to socialise rather than stare at a phone. When HotBlack Coffee opened in Toronto, Canada, the owners took a big risk in today's digital world: it turned off the free WiFi ... so I guess this cafe owner may not want me as their ideal customer.
How can CafeX in San Francisco make two drinks under a minute without any human baristas? This cafe employs robotic baristas, no humans. Customers order via a kiosk, and each order is 100% correct, delivered by a robot (in vending machine style)!
HOW CAN WE THINK DIFFERENTLY ABOUT COFFEE?
The next time you sit in a café, look around and observe the customers, the pricing, the experience and consider the underlying business model. Similarly, when you walk into an Aldi, Bunnings, a department store, a shopping centre or even your local shopping strip, what do you see? How do these businesses survive and thrive? Great coffee (product) for a café is only part of the equation.
Adaptive leadership is about by sensing the environment you are operating in and adapting to it. How will you know what's changing, and how will you see it coming? How can you continually respond to ongoing, novel, business challenges?
For cafe owners, how are they responding to a changing market, consumer preferences, and what customers need? Is it the coffee, the food, a space to work, a social connection or something else? Will CafeX kill the barista? Will cafes become co-working spaces rented by the minute?
I’ve shared some bold examples of niche players in the café sector, doing something outrageously different. These cafes are moving into uncharted territory trialling new models of service delivery and customer experience. Traditional cafes will need to continually adapt to stay relevant.
Ironically, the two cafes I described earlier may be overtaken by new entrants, that is, in the long run they are not competing with each other.
Adaptive leaders need more think time to observe and reflect. Slow things down a bit. How else will you see what is really going on around you? There is no better way to reflect than over a good coffee or two.
I wonder what the cafe industry will look like in 2030? Somehow, though, I think the future of a good cuppa is assured.
About Bruce Mullan
I am a Leadership Coach nurturing leadership excellence in health, aged care and NDIS. I integrate leadership strengths, agile disciplines and a coaching mindset to help leaders successfully navigate the growing complexity of our external world.