#guardiancoffee is the future. dwi.
The future of the high street is coffee shops as far as the eye can see.The future of news is making money from everything but journalism.And the future of anyone who realises either of these things is being laughed at until, suddenly, they win.
Would you like a flat white with your oil change?
It can’t be a nice time to be running a retail establishment. But then, unless you’ve been in the game for the better part of two decades, it’s never been a nice time to be running a retail establishment.
The internet saw to that. If you’re in the business of selling stuff to people, you now have to compete against other companies doing the same thing, but with lower overheads, more potential customers, and essentially unlimited shelf space. On the face of it, you’ve lost.
And it’s even worse when you take into account the fact that one of these companies is “a charitable organization being run by elements of the investment community for the benefit of consumers”.
Amazon doesn’t seem to care about making a profit in its day to day operation. It has diversified into so many areas on top of its normal business—from running server farms and producing sitcoms to building consumer electronics and corralling one of the grandest experiments in the capability of the internet to provide totally alienated exploited labour the world has ever seen—that it’s easy to forget that the meat of the company still consists of buying things at wholesale price and then selling them at slightly above wholesale price with free shipping. That’s a recipe for extraordinary turnover, but not for huge profits: the company made a loss of $39m in 2012.
If you think your company can compete with Amazon on the basis of price, you’re wrong. The only hope you have is that the corporation doesn’t want to compete with you at all.
But although Amazon is more terrifying than many, it shows the future for all. If you have a retail establishment—an old-fasioned, brick-and-mortar (or shipping-container-and-glass, as the case may be) retail establishment—you have to compete with them on things they can’t match. Give up now when it comes to the things they can.
Even that is trickier than it seems, though. We used to think that immediacy would be the saving grace of the physical location. After all, who wants to wait two weeks to watch that DVD which was only an impulse buy? Except that now you can get same-day delivery in a host of American and British cities. Hell, if the timing’s right, it’s actually more immediate that way. Remember in the morning that you want to watch a DVD that evening, and someone will bring it right up to your doorstep.
You think your personal, knowledgable staff are going to save you? Well, they might. But you’d be staking your business on the belief that Amazon’s algorithmic arms race with Netflix won’t result in something which can deliver targeted results to even the most niche tastes. (It’s basically already there: “Customers who bought Recover EP by CHVRCHES also bought Endless Fantasy by Anamanaguchi,” Amazon UK informs me.) The “browsing experience”? That might have been true ten years ago, but I’ve spent enough time staring at the spines of books in Waterstones wishing for a Pinterest style display to know that technology can bring a lot to the table there.
So shops fall back on the experience. Make the very act of shopping something which one enjoys, and people don’t care that they could get it cheaper elsewhere. They aren’t in Eggs Milk Butter to do something as boring as buy a comic; they’re there because they want to be there. Pick up a graphic novel, sit with a flat white and muffin, read it in the shop… the whole thing’s cost £20, but it’s not a bad way to spend a Sunday afternoon. (I have never spent my Sunday afternoon this way, I swear.)
Notice, though, that the easiest way to improve the experience is something which the service sector has known for a while. People will pay a lot of money to just fill time. The trick is to make them fill time in your establishment, not someone else’s. So you plump up the cushions, arrange the stock lovingly, and encourage them to pick up something. Almost as a memento, really, of their lovely time there.
I lied earlier. Coffee shops aren’t the future of the high street. “Coffee & [blank]” shops are. What that [blank] is depends on what you’re trying to sell…
All the news that’s fit to base a speaking tour on
Journalism is dead. Come on, we all know it. The only problem is that it’s also kinda useful.
Reporting is as close to a public good as you can find. I don’t mean “reporting is good for the public”; some of it is, some of it isn’t. But it fits the economic definition of a public good to a tee: it is the creation of non-rivalrous and non-excludable information. That is, the output of reporting, news, can be enjoyed by as many people as possible, with none of them depriving anyone else from their share; and it is, practically speaking, impossible to prevent people who haven’t paid for news’ creation from consuming it anyway.
That latter one sounds questionable. Of course we can, if we want to. The Financial Times’ paywall is as solid as The Wall, now that they’ve closed off the Google bypass. But all that does is stop people from consuming the news as written; it does nothing for preventing the news itself from leaking, nor can it ever.
This is nothing to do with the internet. Even in Ye Olden Days, the creation of news was subsidised by the rest of the paper, and what was exclusive in the first edition was unlikely to be so by the time your competitors had put out their second. Even without them, the fact is that the bigger the story, the more people who haven’t paid you money will know its details. Such is the nature of information.
The current economic crisis—the one in journalism, at least—is based on some more specific problems. Without the need to deliver all news printed in one big bundle of paper, the simple cross-subsidies have died.Reporting now needs to stand on its own. But that’s becoming harder to do as advertising deserts print, and digital fails to catch up.
So what do you sell when you can’t sell what you make? Everything else.
The obvious thing is to leverage what papers are good at: being full of smart people who know a lot about stuff. Get those people in a room to talk about stuff, and other people will pay to hear them. Collect together some of the stuff they’ve already written, and you can charge twice for the same stuff. Find someone who writes just the right sort of stuff, and you can ride their coattails as they tour the dinners of the world, saying condensed versions of their stuff to rich people.
But this runs the risk of being disintermediated. After all, if the paper wants to make its money from people, they might just up and leave the paper. Media companies are not, yet, signing the sort of 360˚ deals which are common in the music industry, so even if you do make a star, it can be tricky to monetise them.
In stead, the value is your brand and your readers. Those, at least, are still yours.
The trend is hardly new, but it has become increasingly obvious in the last couple of years. Whereas before, newspapers were a carefully calibrated operation to drop readers into the hands of advertisers, they are now the curators of a cross-section of society perfectly attuned to the particular quirks of their preferred brand.
Why bother dealing with Thomas Cook paying a desultory rate for a full page advert when you can launch Generic Newspaper Holidays and get a cut on the whole thing? Why take adverts from Penguin when Generic Newspaper Books knows exactly what its readers want to buy, and can sell direct to them? Wine clubs, music stores, the list is nearly endless.
But the best cross-promotion is more than just slapping your name on something which your readers would buy anyway. It’s taking it, and making it about your paper.
If there was one thing the #guardiancoffee hashtag revealed, it’s that the Guardian starting a coffee shop in a container-based pop-up mall in Shoreditch is entirely unsurprising. It’s pretty much the perfect brand extension for them, reinforcing their image in the eyes of their target audience, middle-class metropolitan liberals, while only really damaging it for people who weren’t too hot on their politics anyway.
Oh, and that other stuff
A coffee shop in Shoreditch is small fry. The Guardian is not. Clearly, there are reasons beyond simple revenue maximisation at play here.
If nothing else, a quick tot-up of the sales (publicly available, natch) shows that they aren’t pulling in the megabucks over the counter. But see that logo in the bottom right of the window? Somebody is paying the rent…
But more to the point, the shop only makes sense in the context of everything else the Guardian does. Why’s it in Shoreditch in particular? Because that’s where “Tech City” is, the little cluster of internet start-ups focused on Old Street station. A small group of people whom the Guardian reports on, and who don’t tend to have meeting spaces (or even offices) of their own. So bung a meeting space on their doorstep, and they will come.
And it’s not just a meeting space for stiff chats. It’s also a studio, and the first videos recorded there are already live. A drop-in recording studio has more benefits than you’d think; as anyone who’s done that sort of thing knows, it’s frustrating when you spend more time waiting for a security pass than you do on-camera.
And while you’re waiting for the interviewee in front of you to finish up, you can fiddle on one of their iPads. If you’ve never used the app before, they’ve managed to get it in front of you; like it enough, and maybe you’ll take out a subscription. And all of this is paid for by someone else.
That’s a pretty good deal.
(Incidentally – and this is parentheticals inside asides inside endnotes, I know – one of the underdiscussed aspects of apps is that they completely vault one of the two hurdles involved in getting a subscriber, the holy grail of print journalism. Normally, you fight to get someone to read the paper, then you fight for them to buy it, and then you fight for them to subscribe to it. With an app, once they buy, they’re already a subscriber. Which is part of the reason why it makes sense to hawk the app instead of the paper, especially when you’re doing it to the most tech-savvy audience in the country)
If you run a retail establishment, put a coffee shop in it. It doesn’t have to be a literal coffee shop; put on live shows, do your customers’ nails, blow-dry their Shih Tzus, whatever. Just give them a reason to come to you rather than getting someone else to bring what you sell to them.
If you run a paper, accept that the news is subsidised by everything else, just as it always has been. Except that now, the rest of the paper is also subsidised by everything else, and “everything else” includes literally anything.
If you don’t run either of those things I hope this essay has helped you imagine what it would be like if you did.