When the line at Starbucks is long and yours is short, people come to you.
When people want variety, they come to you. I don't go to the same restaurant in my neighborhood each time - I mix them up. People don't necessarily want the same coffee every day.
Because there are coffee customers in the neighborhood that aren't already yours, you have an audience for your specials and sales that is relatively easy to reach. People won't go five blocks out of their way for a one-day, 20% off sale on bagels, but they might go five feet.
Starbucks marketing is so much more effective than yours that they will attract customers that you never could. Once they're in the neighborhood, these customers are much more likely to come and taste your coffee - after all, if your coffee sucks, they can always spit it out and go back over to Starbucks. If your coffee doesn't suck, some of those customers will become regulars. Many people prefer local shops over chains... if the effort to switch is low, and if you make it easy to switch back.
I remember reading that this is why specialty shops often tend to cluster in specific districts of a city. You would intuitively think that the best spot to open a new store is an underserved location far from existing shops . But, in fact, you're often better off opening a store one block away from your competitor, where there's some pre-existing traffic that is happy to do some comparison shopping. I once talked to a computer store operator who had deliberately set up shop across the parking lot from a new Micro Center, and he told me the same thing.
To get my coffee fix, Starbucks is always the second choice. The only time I drink that sewage is if I'm stuck in an airport. In Baton Rouge, there is a local chain of coffee houses called CC's that serve much better brew. The mom-and-pop shops do pretty well, too.
When the line at Starbucks is long and yours is short, people come to you.
When people want variety, they come to you. I don't go to the same restaurant in my neighborhood each time - I mix them up. People don't necessarily want the same coffee every day.
Because there are coffee customers in the neighborhood that aren't already yours, you have an audience for your specials and sales that is relatively easy to reach. People won't go five blocks out of their way for a one-day, 20% off sale on bagels, but they might go five feet.
Starbucks marketing is so much more effective than yours that they will attract customers that you never could. Once they're in the neighborhood, these customers are much more likely to come and taste your coffee - after all, if your coffee sucks, they can always spit it out and go back over to Starbucks. If your coffee doesn't suck, some of those customers will become regulars. Many people prefer local shops over chains... if the effort to switch is low, and if you make it easy to switch back.
I remember reading that this is why specialty shops often tend to cluster in specific districts of a city. You would intuitively think that the best spot to open a new store is an underserved location far from existing shops . But, in fact, you're often better off opening a store one block away from your competitor, where there's some pre-existing traffic that is happy to do some comparison shopping. I once talked to a computer store operator who had deliberately set up shop across the parking lot from a new Micro Center, and he told me the same thing.