What lessons can coffee chains take from the independents?


What lessons can coffee chains take from the independents?

What lessons can coffee chains take from the independents?

Operations and HR Director Lisa Chambers discusses how big coffee chains can emulate the behaviour of independents to improve guest experience.

Traditionally, it’s the big brands that every business wants to emulate; the ones with the proven track records, the large customer base, the tried and tested recipes for success.

But recently, things have been changing in the coffee industry. Large coffee chains are being hit with reports of “brand fatigue”, suggesting they may be becoming victims of their own success as the public tires of seeing the same chains on every high street.

In contrast, independent and small chain coffee shops seem to be flourishing. 74% of those surveyed by the Caffe Culture Show reported a like for like turnover increase last year, and over a third are planning brand expansion in 2016. Consumers may be experiencing brand fatigue when it comes to the big chains, but they’re clearly feeling energised by smaller businesses.

And of course, this trend shift hasn’t escaped the notice of the big chains. Gradually, the practices and habits that help independent shops and small chains thrive are being implemented by their larger counterparts, in an effort to recapture the waning interest of diners.

For instance, independents have long had the edge when it comes to offering guests a more tailored, personal, and authentic experience; simply through serving fewer customers, they are able to spend more time customising the guest experience for each one. It’s something that has understandably always been popular with guests. As our research at HGEM demonstrated earlier this year, people feel most welcome when treated “less like customers and more like guests”.

It’s a sentiment I’ve seen seeping over to the big companies, and it’s effective. The majority of staff at a Caffé Nero’s in my city know my name, and remember my order. It’s a gesture that brings me back to them most mornings, rather than any of the other large chain coffee shops near the office, as they offer me a fast, efficient, friendly service that requires very little effort on my part.

Last year, our Head of Business Development, Ollie Navias, highlighted another key strength of small, independent businesses – the freedom to innovate. As Ollie explained, “new brands can be more agile and quicker to adapt to changes in demand and food trends… They can attract interest by disrupting the status quo; shake up the service offered, make it something that guests return for and make it a recognisable part of the brand image.”

There’s no doubt that in the face of brand fatigue, large coffee chains have been endeavouring to mimic this adaptability and innovation. Costa is expanding beyond standard coffee shop fare and trialling hot food, some Starbucks branches are moving into the evening market with evening menus and alcohol, and Pret is adapting to the surge in vegetarian diners with a vegetarian restaurant in Soho.

But as flexible as big chains are trying to be, there are still a few lessons left for them to take from the smaller chains and independents. For example, generally the focus is much more on delivering quality over quantity in independent venues, allowing them to experiment with unusual blends or new varieties of coffee, and bring in their ingredients from local or ethical sources. Employee retention is often better, allowing for a more in depth knowledge of the menu and an ability to advise and recommend drinks for the customer, as well as discuss the products with knowledgeable guests.

In addition, the ability of the staff to make unilateral, independent decision is often hindered in a strict corporate structure, whereas often in independent coffee shops the servers are empowered to make decisions regarding guest experience on the spot, without having to double check with managers and supervisors first. Worse still, of course, is when management have authorised this independence, but staff don’t have the confidence or knowledge to action it and are left floundering.

Living in a city with a large number of fantastic independent coffee shops, I personally visit both these and the larger chains when looking for a coffee fix. Caffé Nero is my choice of venue first thing in the morning, when I’m simply looking for a quick drink I can grab en route to work. I’m looking for a consistent and fast service.

However, if I want to sit in, I will pick an independent coffee shop every time. I appreciate being in a cafe where you can see the vision and the values of the founder in the staff and décor. It’s an atmosphere that encourages me to linger and appreciate the coffee experience, rather than order a drink and be off. I spend more, I bring my friends, and I recommend it to others. The coffee passion that is demonstrated in some independent coffee houses in Bath is more addictive than the caffeine!

These are potentially difficult hurdles for the large operators to overcome, needing a shift in employee mind set rather than company policy. It is, however, not an impossible task. At HGEM, we recently discovered the unsurprisingly huge impact staff training has on guest satisfaction and spend. At the same time, it was revealed that independent operators are storming ahead when it comes to staff training, with 35% of guests believing they have the best trained staff, compared to the 27% who thought that chains did. More investment in the education and training of staff will allow coffee chains to wake guests from their brand fatigue.

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