The US coffee market is an 18 billion dollar industry, where 2014 showed had over 20,000 running coffee shops across the US.
With such a hot market with high competition and almost no barriers to entry, coffee shops must implement a successful strategy to differentiate itself in order to gain market share.
With coffee shops being ubiquitous, differentiation is key to succeed in this industry. Top players such a Starbucks and Dunkin Donuts have seen the success and of their business and have established a strong brand presence with a loyal following. Customers experience little to no switching cost, so get your coffee shop to obtain some of the market share through these innovative ideas:
A coffee shop in 2014 provides more than just coffee. What makes you different?
Change up the mood and setting of your place. Decide on what kind of theme you want to have in your coffee shop. Take in mind decorations, music, lighting and interior design. Your atmosphere creates your culture. Most importantly when choosing a setting, make sure it is a comfortable and friendly environment for people to meet up, chat and enjoy their coffee.
Majority of the customers will enter before 11 Am to get their morning caffeine. Play around with other food items that will match these customers. Consider including a fresh bakery where baked goods are made every morning. Other great breakfast items can be oatmeal, granola, yogurt and fresh squeezed juices added to the menu. When business slows down during lunch time hours, increase revenue by providing specialty drinks, sandwich and salads to encourage more sales. Whatever you add, make sure it is either a different product from local competitors or tops them in quality.
If you are a smaller operating coffee shop competing primary with the large chains, try to get your community involved to support your shop instead. You can promote cultural events such as art displays, movie premieres, live music nights or other interactive ideas.
Create special day events to promote families to come in like “Family Coffee Sunday” where families can enjoy discounts. This will also bring in more people at once and allow customers to interact with each other and bond at your shop.
Whether you have different loyalty cards, gift options, promotions or even a whole new paying system it will intrigue customers. Take for example a self-serve coffee shop in North Dakota that lets customers physically get their own coffee and choose how much they want to pay for it. This risky move of using an “honor system” has paid off where customers have been seen to be an average of 15% more generous than paying for a normal costing drink.
Other store differentiations can include cool apps or special services. For example you can offer customers the option of calling in or placing an order through an app or online to pick up coffee at a certain time to avoid long waits and lines. Analyze your surrounding community to see what needs they have and what services they would value in a coffee shop.
Do something eye catching that your neighboring coffee shop does not provide. Perhaps you can add a temporary or consistent artisan that will make special designs in your coffee. These can be requested by customers to add a fun element to coffee. Another options is to include a servant to come around and refill customers that stay at your shop with free black coffee. Other options are to include some mini contests where you show off the winner and offer gifts to encourage future participation from others.
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