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February 19, 2005

Coffee Time

Every morning on the way to work I walk through a major business complex, and on the right hand side, just next to the building entrance, there's a coffee shop. It belongs to a Japanese chain, not Starbucks or Tulley's - those are across the street and down a ways. Almost every morning, unless I'm uncharacteristicly late, I stop have have a coffee and muffin or some pastry. It's a welcome break, and gives me the chance to spend ten or fifteen minutes just thinking. It has become part of my morning ritual. So much so that I tend to get frustrated and uneasy if I don't have a glass of their iced coffee first thing in the morning.

On thing I've noticed is the big changes that coffee shop chains have made in their operations over the past ten to twenty years. They have really learned how to merchandise the coffee drinking experience - at least the successful survivors have while the others have fallen by the wayside. For example, they've learned the critical importance of location. Not just location, but orientation and how it plays to human behavior. They place and layout their shops to draw people in.


This particular shop, the one I visit every weekday morning, is located right next to the main building entrance. Most people walk down the sidewalk in front of the shop and then make the right turn to enter the building. The shop layout features lots of glass, and doorways that encourage people to zip in and out - almost as if they were taking a short cut. The glass gives a feeling of openness and transparency rather than acting as a barrier. And the shop is always bright and well lit.


The area right in front of the building features a shallow decorative pool and fountain, which while it looks great forces people to walk down the sidewalks in front of the shops. You might even think that it was deliberately planned that way... It's good news for the coffee shop. People walking towards the building main entrance in the direction of the green arrow have this view-


While people that take the other path (red arrow) see this view just before they reach the main entrance-


In the morning some of the customers, like me, want to sit down, relax, and enjoy their coffee at their leisure. But a lot of customers just want to pop in, buy their coffee, and then go on to the office as smoothly and easily as possible. This shop layout obviously has both sets of customers in mind. Lots of chairs and tables situated in small groups or clusters. Yet it provides a clear, open, quick path for the drop in customer that just wants their coffee to take out. I've never taken a talley, but my guess is that more than half of the daily sales are take out - perhaps even more.


Another major design attribute is the choice of colors. Ten years ago all the coffee shops here had white or light cream colored walls, and all the tables had table cloths. At least they started off that way. But, because smoking is still allowed in public places, and a huge percentage of the men and women smoke, the coffee shop walls would quick take on a dingy, nicotine color. Obviously no one ever made the connection between what the smoke was doing to the walls, and the damage it was doing to their lungs. Some coffee shops, like Starbucks, ban smoking inside the building entirely - but provide tables and chairs just outside. Others, Tulleys Japan specifically, have separate smoking areas that are actually walled off much like a fish bowl. In this particular coffee shop, only the counter right at the very front of the shop is labeled "No-Smoking". Luckily most of the smokers tend to sit towards the rear of the shop leaving the front part of the shop free for non-smokers to enjoy. And to aleviate the wall discoloration problem, they picked paint and wallpaper whose color and tint comes pretty close to matching, or complementing, the color of nicotine. It sounds odd, but in actual practice it seems to work quite well.


They've gone to great lengths to give the shop a homey, warm, wood feeling.


Even down to adding table lamps and plants that you would normally find in a living room, or perhaps an upscale library.


Much like the traditional Japanese dividers used in tatami rooms, this coffee shop uses low wooden dividers capped with a short panel of glass. Of course everyone can still see and hear everything that's going on. But it gives the illusion of privacy, and that's really all that's important.


Somewhere along the way, I think about five to eight years ago, the coffee shops switched over to self-service. It makes a lot of sense, cuts down on their overhead - if not their pricing, and seems to work out well. There are times when the staff gets too busy with the crush of customers, to the point that dirty cups and trays stack up filling the return shelves. But that never lasts very long. The customers seem to come in waves, probably driven by the arrival schedules of commuter trains at the station right across the street.


What are the primary attributes?

  • Clean
  • Efficient
  • Convienent
  • Comfortable
  • Easy
  • Light
  • Warm
  • Value

Somehow they managed to figure out that they are in the 'experience' business. Anyone can sell a cup of hot flavored water. The winners in the game are those that provide the best experience for the customer's money, not necessarily the best coffee. And, for the most part, the price is not a major determining factor.

February 19, 2005 | Permalink


It is a great article to analysis Japanese Coffee shop. Now Starbuck is getting into China. I really want to set up a chain to against it. Now I try to get into graduate school and learn the supply chain management.

How do you think? If my future plan is to open a chain coffee shop in China...

Posted by: Denggo | Jan 30, 2006 11:44:32 PM

Excellent article - thanks!!!! We are in the process of setting up a coffee shop in Tianjin, China. Found your article/diagrams and analysis very thought provoking!

Posted by: Matty | Nov 26, 2007 2:46:18 PM

this is really nice

Posted by: | Jun 30, 2008 10:36:04 PM

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