Starbucks' space marketing shines in Korea with 'The' stores

Starbucks “The Yeosu Dolsan DT” in South Korea embodies the business philosophy of its founder and former Chief Executive Howard Schultz: It’s not just about coffee. It’s about culture.

The store in Dolsan, Yeosu is a new premium Starbucks café, with its name starting with the capitalized definite article “The” to distinguish it from its regular outlets.  

The US coffee chain runs four stores in South Korea with a “The” added to their name. It hopes to make each a symbol of their region with their own storytelling, incorporating the unique characteristics of each region.

Located on the popular tourist attraction of Dolsan Island, South Jeolla Province, it has attracted an average of 2,500 customers a day since it opened on Aug. 10, according to Starbucks Korea on Thursday.

The daily visitor numbers are the highest among the four "The" Starbucks cafés and more than twice as many vistors to its regular outlets.

Starbucks “The Yangpyeong DTR,” 44 kilometers east of Seoul, is the largest Starbucks outlet in South Korea with a total floor area of ​​1,200 square meters.

Starbucks “The Bukhan riveR,” the only “The” Starbucks store in Seoul, has further differentiated itself from other coffee houses. It introduced a pet park for companion animals.

Each of “The” two Starbucks cafes brings in an average of 1,000 visitors on weekdays and 1,500 on weekends.

"Our strategy is to create a space where you can visit and enjoy this place as a destination rather than just to drop in,” said a Starbucks official.

“The Yeosu Dolsan DT’s visitor numbers were surprising for us, to be honest.”

Starbucks stores are divided into five categories: R (Reserve), DT (Drive-Through), Community Store (Co-existence), General Store, and The stores.

“The” stores were only introduced in Korea as part of its space marketing, to showcase the utilization of space. 

Starbucks opens concept stores in each country that emphasize the local culture. In Bali, Indonesia, Starbucks Dewata Coffee Sanctuary depicts a coffee plantation. It is its largest store in Southeast Asia.

In the US and Japan, it runs stores with huge roasting machines installed inside. 

Howard Schultz has said that Starbucks sells a “human connection” by providing a neighborhood meeting place for people to connect with each other.

Its strategy in South Korea is drawing the attention of the restaurant industry as space innovation has emerged as a hot topic with the lifting of COVID-19 restrictions.

“In order to attract customers in the saturated domestic coffee market, stores need a differentiated strategy,” said a coffee industry official.

“Some brands are looking for locations near 'The' cafés to follow Starbucks.”

Starbucks has been growing in South Korea, a country where adults drink an average of two to three cups of coffee every day.

It runs 1,841 stores in South Korea, up from 1,777 as of end-2022. Its revenue increased 9.6% on-year to 1.39 trillion won ($1 billion) in the first half of this year.

Write to Soo-Jung Ha at Agatha77@hankyung.com
 

Yeonhee Kim edited this article.