By Thomas Gilchrist
Comments by Evan Lisull
It brings me great joy that the name of this “coffee” shop is yet to be recognized by whatever online dictionary is used by this program. It shouldn’t be spoken.
(I suppose, then, that you must similarly have a disposition against the works of Herman Melville. Furthermore, these laws over what must or must not be spoken echo the religious edicts of the Jewish kingdom with “YHWH”)
I suppose, then, that it is necessary for me to explain why exactly I am here, and I assure you, it was out of pure necessity, a necessity that I shall never fall victim to again for as long as I live.
I came because I wanted to be in a coffee shop for the the comfort and the internet, but instead I got neither–no comfort, no internet! I thought for sure I would at least have one or the other, but alas neither, nien, mon frere.
(Coffee shops, by definition, do not provide “comfort” nor internet; they provide coffee. Were you searching for internet, an internet café would have done the trick. Were you searching for comfort, then you join the ranks of several billion humans in search of the same object.)
As I currently sit in the most generic of Starbucks, one situated next to a highway, in the parking lot of a strip mall in the business district of Boulder, CO, near the CU campus, I am outraged.
(A pro-market side point: the mere fact that a coffee shop can be ‘generic’ is a miracle of the international market.)
Even though I had already had my morning coffee, I purchased another cup, and an apple fritter, goddamn it, because it was my plan to hole myself up here for several hours, and I wanted to pay for my chair and my wireless.
(No; if you had wanted to pay for your chair and your wireless, you would have payed for the wireless access card. Instead, you bought an ‘apple fritter’ (as a side note, what self-respecting man buys an apple fritter? Really?), in some kind of guilt-based indulgence towards free-riding off of the purported internet access and comfortable chairs.
The market system is not a guilt system; you do not buy something because you feel guilty about taking it for free. You buy something in order to access it; taking without permission is theft, and has been discouraged for the entirety of civilization)
But then–holy mother of God–as I tried to access the internet, not only to check the Tiger’s score, but to take care of several business matters as well, I was informed that not only would i have a maximum two hour window in which to browse, but that this window required the purchase of a “Starbucks Card,” along with a registration that required you to give the company not only your email address, but your home address as well.
I haven’t touched my apple fritter, and my coffee I made this morning was better than this cup.
I even walked up to the counter to
purchase my card, rationalizing that I would use the access for tomorrow as well, but when I found myself amidst a line of five homogenous automatons waiting for their morning fix, I said fuck this, sat back down in what can only be described as a purple coffee shop chair (for I can think of no other possible placement for such an overly modern piece of upholstery,) closed my laptop, stewed, and opened my book.
(‘Homogeneous automatons’? Do you know this for a fact? You are, after all, in Boulder. One perhaps is a college professor of Aramaic, while another could be an independent artist. You yourself were waiting in line at Starbucks; by your introduction, does this not make you an automaton as well? And if not, what else could an angry customer think standing behind you?
It’s also amusing to note that the chair only became ‘overly modern’ after it turned out that the wireless was not free. Talk about the advance of technology.
The question raised by this fraud is simple on the surface: to what extent should people be allowed to self-regulate within homogenized capitalism?
(‘Self-regulate’? ‘Homogenized capitalism’? You need to introduce these forms)
At school, I frequent two wonderful coffee shops, neither of which has more than two branches, and one that roasts its own beans daily. There, while free refills aren’t provided, you are allowed to do what you want for as long want, with the understanding that the shop is often crowded, and you are a guest as well as a customer, meaning that you should be polite in return for the good you are receiving–a comfortable atmosphere, workspace, coffee, and the internet.
(You ignore the fact that those coffee shops are significantly more expensive than Starbucks. It may be a choice that can be made by an upper-middle-class liberal arts college student whose education is being subsidized, but for many they cannot simply afford to pay an extra dollar for coffee.
Secondly, you ignore the issues of location. Kalamazoo and other cities may be able to afford a plethora of coffee locations, but virtually every other area in the world is unable to subsidize such habits. In fact, before the advent of Starbucks, almost no one had access to anything like the coffee house experience. Starbucks may be inferior in your worldly view, but most choose between Starbucks or Folgers, with perhaps a Dunkin Donuts thrown in for good measure (Sidenote: surprisingly good coffee. Really.)
There is no obligation to be polite because it is an independent coffee shop; the obligation to be polite derives from basic social mores. The good you are provided is not because of your politeness — I can “Yes ma’am” and bow to the gentlemen, but if I don’t put money down, I’m not getting a drop of coffee. The other ambience you mention — including the internet — is merely provided as a means by which to draw customers in to buy the coffee. If your favorite coffee shop determined that the draw of the internet did not compensate for the cost of providing that internet, they would drop it; in fact, being an independent coffee shop, they would have to drop it immediately; the profit margins are so slim, that they cannot afford to do otherwise.
Self-regulation–
When people are at a coffee shop for a long time, usually two things happen: First, one runs out of coffee, and second, one gets hungry. This has a couple of interesting, if obvious, consequences: the purchase of more coffee (especially if its good, and refills are discounted) and the purchase of food (which coffee shops retain the ability to price absurdly high, especially if its fresh baked or homemade).
(Pastry costs are high because it is not the main product of sell. Thus, they do not buy in high bulk, which drives the overall cost upwards.)
This is common behavior at many smaller coffee shops: people may be out to get the most for their money, but they’re also willing to be reasonable, especially if the product they receive in return for their money is exceptional. It’s a microcosm of brand loyalty. If you purchase a car from company X, and you view its value a
s exceptional, (many good qualities for a reasonable price) you’re likely to purchase your next car from company X as well. Car company X could have made you purchase a credit card with $1,000 of your own money on it that could only be used to purchase items from Car Company X (options, service, t-shirts, etc.) before you are allowed to purchase a car from Company X. Only the catch is that you can only use up to $500 of your credit per vehicle, warranting a return to Company X for your next vehicle purchase in order to spend the extra credit.
(Being reasonable is getting the most for their money, and you’ve said as much throughout. Why, one might ask, would ANYONE go to a non-Starbucks if the coffee was more expensive? Because, as you have said, it tastes better, has a better ambience, has free internet, reflects your values, etc. etc. etc. Consumers make cost-benefit analyses: in this case, they ask themselves whether the dollar extra for a cup of coffee is worth the extra benefit. You would answer in the affirmative, while others would answer in the negative.)
Company X could have many different reasons for this decision to regulate Credit. They figure that the chances of the credit encouraging the long-term purchase of at least two cars from Company X outweighs the risk involved of alienating a customer because of the extra $1,000 that the customer must put down in order to have the right to purchase from Company X.
(Companies innovate because of competition. Using your car metaphor, assume that Volvo makes impressive cars, and builds a brand loyalty. You would argue that Volvo could thus afford to make cars of lesser quality, because of this ‘Credit regulation’ (an absolutely baffling term — I think you’re hinting at increasing the marginal profit (i.e. increasing the price of a product at a higher rate than the quality of said product) ). Is this really what happens/would happen? Have Volvos gone down in quality because of their recognizable quality?
But suppose Ferrari decides to make a really shitty cars — pull a fast one on the customers, if you will. Well, the brand name is tarnished; people will no longer give Ferrari the benefit of the doubt that they once did. In fact, the collateral loss will outweigh the benefit of the increased profit margin, because people will have less confidence in the older models than before, and will be less inclined to purchase them
A brand name is an extremely valuable asset, and extremely fragile. Businesses do not dare toy with them like you seem to suggest
(Random note: why the hell are you going back and forth between coffee and cars? It’s vexing, outside of any intellectual issues.)
But why would X to this? Why not just go with Model A, in which their superior value is what draws the customer back, as opposed to the customer’s need to get their money’s worth? Obviously two key things play into this decision to go with Model B. The first is that either Company X realizes that their value is at least $500 better than their competition, or that, somehow, in the areas in which the credit policy is imposed, there is no immediate competition to X, i.e. Car Company Y exists in the area, but a forty-five minute drive is required to visit their dealership.
(I like the fact that you used ‘Model A’ as your generic model, but it would’ve been even more fitting if you had gone with ‘Model T’. Then, your question essentially becomes, “If Model T worked well, why would consumers opt for a newer model?” This is especially funny, as you are an avid car enthusiast.
Why do companies create newer, more expensive products? I would like to highlight several reasons. One is due to the thing you seem to suggest did not exist — competition. Without competition, you get the cars that the Soviet system created, the lovely Yugo. So let’s apply this further: why didn’t the Soviets simply make more and more expensive cars? After all, there was no competition: Company Y wasn’t 45 minutes away; it was across the goddamn Iron Curtain. No, Yugos were shitty and cheap because the Soviet people couldn’t afford anything else. If they made significant price increases, more and more Soviets would find a way to go without cars.
Similarly, if Starbucks makes these overpriced products that are inferior, guess what? People adjust their behavior– some will go elsewhere, some will buy less often, and some will start brewing their own coffee. Starbucks loses on the bottom line and has to close 600+ stores.
But another beautiful thing about capitalism is that you can afford to make mistakes. If you overspend in the Socialist Republic, you starve. Here, your credit rating goes down.
But there is also something else: Company X could realize that they have a advantage over their customer base, in that they are aware that their quality is lacking, but the customer is not, and that this idea of long-term credit appears at face value to the simpleton to not be a bad deal. Either that, or they are trying to trap those who are yet to figure out that their is a much better Car/coffee experience available, if only they were willing to look.
Ah, the lack of knowledge issue. This goes back to your hatred and distrust of the common man.
But your ‘valuation’ is done within coffee pricing, rather than on a broader scheme i.e. budgeting. The Starbucks question is a simple one for J.Q. Public: “Is the utility I derive from this unit of coffee I have purchased worth the price per unit I have paid?” Or, in his words, “Is it worth it?” For most people, this is a yes, and that is fine. To suggest otherwise is actually a moral statement, a judgment of personal habits. I think that spending $19.99 on a set of “Girls Gone Wild” is a waste of money, and would be better applied at, say, happy hour. But if you were to buy the DVD set, who am I to judge? The freedom to chose is in fact what we just celebrated this past weekend, embodied in that right to the “Pursuit of Happiness.”
Yet you retort: “But they could have it so much better! If only they went to Independent Brew, Co., or even a Beaner’s (Note: I refuse to use this new, PC shit ‘Biggby’s’ name)! Why, oh why, are these poor fools still drinking that swill!”
Could they have it better? You seem to imply that they would enjoy those places more. But different people have different valuing systems, and thus derive different marginal benefit from different products. 99% of the world cannot tell the difference between Folger’s and Ind. Brew. Co. — and perhaps they are missing something. But this being the state of things, how can you justify, or suggest, or demand that they appreciate the IBCo? It’s simply not worth it for them.
Allow me this one final point. Suppose, however, that Gilchrist the Wise were to bestow his wisdom on the entire people, who realized the Truth that Kalamazoo Independent Coffee Company (KICC) was the superior brew. What would happen? The store would packed to the brim, the lines pouring out to the Illinois border. The store must expand! And expand it would, starting up branches around Kalamazoo, then Michigan, then the Midwest, and eventually the coastal ports and the entire world.
This is exactly what happened in the case of Starbucks.
We return to necessity, or demand, as it were. If there are no other coffee shops in the immediate area, as is the case with this Starbucks (remarkably), they have the ability to set their prices, and their conditions for providing their product, as if they were dealing within a quasi-monopoly market (term?). I know for the fact that the Starbucks back home, which are all located in heavily coffee shop-populated areas, all of whom provide unregulated complimentary wireless, do not have this heinous policy of two-hour limit card purchasing in order to receive the internet. But here that is ok, but if they had any real competition, it wouldn’t work.
(You are conflating the providing of Internet with the providing of coffee; I’ve touched on this issue before. Yet the issue is the same, so feel free to substitute the variable of your choice.
The point is, these ‘quasi-monopolies’ exist because it is damn hard to provide internet/coffee in these regions. Because the market is smaller (lower return) and the transportation of inputs (beans, service, etc.) is higher, due to isolation and other factors, prices must reflect that.
The surprise is not in the high prices, but in the fact that such a good — be it Ethiopian coffee or wireless internet — can be had at any price in rural Montana, or S. Dakota, or Nicaragua.
Part of the problem in fact results from too little of the free-market. Zoning laws prevent many people who want to start an independent coffee shop from doing it. They must have property located in certain areas of town. They must receive approval from the City Council or a similar body. All of this imposes costs on the coffee-shop-owner-to-be, discouraging the project. Why do you think it’s so hard to start a restaurant?
(On a more specific point, there are many, many coffee shops in Boulder; there are as many coffee shops in Boulder as there are in Ann Arbor, if not more.)
they, of course are still governed my the market. Their coffee prices are the same as every other suburban part of the U.S. But people have principles, goddamnit, and just as if they served $5.00 drip, no one would buy it, people should refuse this idea of ostrasizing internet.
(And they have. See Starbucks stock’s graph, as well as the fact that it has closed 600 stores in the past week.)
I bought my damn apple fritter because I wanted to pay for my internet, but instead I’m going back to my apartment to find an ethernet cable, on the principle of the matter.
(Again, no. You’re going back to your room because you need the Internet. If they had provided the Internet, you would’ve have so much as frowned at anyone.
What this story comes down to is that you are an Angry Customer. You had an expectation of what would be provided, and that expectation was not fulfilled. That is completely fair. But to suggest that this is a failure of the market system is absurd. It would be a failure of the market system if you had paid for your apple fritter and discovered that there were ants inside.
You are not the only person to whom this has happened. We have a Starbucks in our apartment complex, and I discovered the same thing as you. I was surprised and upset, but guess what? Starbucks didn’t get any money, and since it seems to be recurrent throughout the area, they won’t get any in the future.
Whether or not this is a good model is something I cannot say with any degree of certainty, seeing as I don’t have the company’s balance sheet in front of me. However, I can say that recent trends indicate that this is not working exactly as planned, and may change down the road.
A similar parallel is the divide between the New York Times and the Wall Street Journal. The Times provides free access to its news stories for up to a week, while a membership is required for the WSJ, even for the day’s articles. Obviously, the NYT has higher traffic
But is this more profitable? Again, it is tough to say. Both sides seem content with their model. And it seems that each respective consumer is content with the system as well. Has this led me to read less of the WSJ than I would like? Certainly. But that is a choice I have made, and that the company has made. Everybody is free to choose.
I can imagine in my head a rejoinder that ‘profits aren’t everything.’ Well, they are. Without profits, reporters, art reviewers, critics, and other journalists don’t get paid. Without profits, foreign correspondents cannot afford to travel to the far-flung countries from which they report. Without profits, there is no good journalism. In fact, there is no good anything.
I have reiterated the phrase ‘freedom of choice’ several times. You, sir, have that choice, and I assume that next time you will choose more wisely.
