This is hardly breaking news: Survival in the increasingly crowded and competitive coffee marketplace is hard, very hard. In a world of strong international chains and franchises, the average street corner coffee shop wages a daily battle to nibble at new parts of market.
However, opening a new bar is the dream of many, but is there still place left for new entrants? And what should one do to create their crowd of loyal customers when they’re not running a long bar?
Mariano Peluso, heading the research team at CoffeeBI, has a clear view about this. “It is true, the coffee space is pretty packed. However, if you are able to cut out your own niche and differentiate yourself there is still plenty of space. The number of players is growing but so is the number of customers and their interest in getting more than a shot of hot dark water”.
So, if perfect execution is the key, opening a coffee shop is still a long path, closer to science than to improvisation.
While there is still some magic surrounding the job of barista, the truth is that formal training is not optional. “Getting the coffee right is still a key factor for success” explains Gabriele Cortopassi, expert in coffee shops and founder of the two blogs Aprire Un Bar (Opening a bar) and Il Caffe Espresso Italiano (the Italian espressos). Gabriele organizes classes for baristas and coffee owners in the wonderful atmosphere of Florence, and his 5-day classes teaching these baristas and owners how to make the perfect espresso and how to manage a coffee shop is always fully booked months in advance. “Italy has still got a lot to say about coffee, but the reality is that a large part of our student base now comes from abroad; when they leave Florence they go back to Korea, Canada or India to open a bar”.
But while perfect execution is mandatory, true differentiation requires even more work.
A few kilometres north, we cross the Alps to reach Lausanne, a picturesque Swiss city on the Geneva Lake. Sheil, a guy in his 30s who started his career in banking, has just opened a new coffee shop there with an innovative crow-founding formula. “There are plenty of coffee shops, good and bad ones. With Sleepy Bear Coffee , I really wanted to make something different. Not only serving coffee but helping my customers appreciate it”. In the era of specialty coffees, Sheil has hedged his bets on coffee quality. But there’s more. “Opening a coffee shop in Switzerland requires a significant financial investment” explains Sheil. To complement his own funds, Sheil embraced the idea of crowd-funding. “We used social networks and word of mouth to involve people who believed in my project. In less than 3 months I had than 300 investors”. Each one of Sheil’ s investors paid in advance a small contribution between 90 and 270 EUR. In exchange, they get free coffee for life at Sheil’s Sleepy Bear coffee.
But acquiring a client base is not enough. In Lausanne, a pretty university city in the French part of Switzerland, there are plenty of coffee shops, chains, and corner bars. How to stand out even further? How to increase client retention and engagement in such a competitive environment?
Sheil had the brilliant intuition to point to technology. He needed something that could engage his customers, an engagement that starts before the client even entered the shop and continues after leaving. When people think about loyalty cards, Sheil thought to introduce Acrengo in Sleepy Bear coffee: “the loyalty card that talks”, an innovation app that takes the place of the common paper loyalty cards but that contains 4 powerful programs to engage customers. Innovation and differentiation are keys factors of success, according to Sheil. And now he uses Acrengo to send offers automatically to his clients, to inform them when the coffee shop has a new interesting promotion, to reward his best customers when they share news about Sleepy Bear Coffee with friends, and to retain his irregular clients automatically. Acrengo is the loyalty card that talks, but loyalty is justthe beginning of a journey that allows shops to stay in contact with clients. The way to success goes through innovation and Acrengo can boost the business of coffee shops and chains. Ask for further information on www.acrengo.com.
We are a small group of people committed to bringing or selecting unique stories on the B2B coffee industry. We work with CoffeeBI analysts, researchers, and coffee experts from several parts of the globe.