Retail Environment & Service Evaluation: A Starbucks Durham Case

This report provides an in-depth evaluation of the retail environment and service quality at a Starbucks coffee shop located in central Durham, UK. It begins with an introduction to Starbucks, its target market, and potential business risks related to evolving consumer needs and the importance of the 'third space' concept. The evaluation of the retail environment utilizes the stimulus, organism, response (S-O-R) model and Belk’s taxonomy, focusing on physical surroundings such as decor, lighting, aroma, and layout. Positive aspects include warm colors, wooden furniture, comfortable lighting, and the pleasant coffee scent, while negative aspects include noise levels and a crowded layout. Recommendations for improvement include introducing background music and redesigning the store layout. The service evaluation applies the flower of service model, assessing both core and supplementary services. The core service (food and drinks) receives positive feedback, while supplementary services like information, consultation, and order-taking are examined for strengths and weaknesses. The report concludes by suggesting that while Starbucks generally provides thorough and warm service, there are areas for improvement in the Durham store, particularly in addressing noise and layout issues to enhance the overall customer experience.

Introduction
Starbucks was founded by Gordon Bowker, Jerry Baldwin, and Zev Siegl, who
opened the first shop in 1971 in Seattle, Washington (Lemus et al., 2015). Currently,
Starbucks operates over 32,000 shops in 80 countries worldwide and is the leading
coffee bean roaster and speciality coffee retailer globally (Starbucks, 2023a).
Starbucks' products are not limited to food and beverages but also include seasonal
mugs and brand derivatives. Not only do they sell high-quality coffee beans but also
handcrafted coffee, tea and other beverages, as well as a variety of high-quality food
products through its shops (Starbucks Corporation, 2022). In addition to the flagship
Starbucks Coffee® brand, the company also sells goods and services under the
following trademarks: Teavana®, Starbucks Reserve® and so on (Starbucks, 2022).
Starbucks' core service is to provide coffee and food with unrivalled hospitality to
their customers (Starbucks, 2023b) who are primarily high-income adults.
Democratic segmentation reveals Starbucks’ target market to include 18-24 year
olds and 25-40 year olds from mid- to high-income households (Haskova, 2015). In
the UK, Starbucks' main competitors are chain-brand coffee shops, such as Pret-a-
Manager, Costa Coffee, Caffe Nero, and so on.
It is vitally important for all successful companies to identify possible future business
risks. With regard to Starbucks specifically, these could revolve around continuing to
meet the evolving needs of their consumers. The willingness of customers to buy
may decline if these needs are unmet and as their lifestyles and drinks preferences
continue to change. For instance, modern consumers are becoming steadily more
health conscious and opting for more nutritious foods and beverages (Liu et al.,
2022). Although Starbucks offers product customisation and calorie counts
(Starbucks, 2020), customers will only make purchases when these customised
drinks meet their requirements.
Ensuring the provision of high-quality products is one issue, but another equally
important one is the retail environment. Coffee shops are not only a place to buy a
drink but also a venue where people can meet to study or work together. If people's
everyday space can be divided into home, office and other spaces (Liu et al., 2021),
Starbucks has created an in-between state of 'not home and not office’ (Mi et al.,

2021), which they refer to as the ‘third space’ for their consumers. The retail
environment provided by Starbucks influences their customers' likeliness to stay and
to purchase more as well as their level of satisfaction. Therefore, it is crucial that
Starbucks stay connected with its consumers’ preferences and are willing to update
and improve its retail environment accordingly.
According to Starbucks' official statistics, they opened 318 shops in the UK in 2022
(Starbucks Corporation, 2022). The service levels offered in each of these offline
stores can differ substantially. Therefore, monitoring individual stores’ standards of
service and improving the quality of customer care wherever necessary is a further
issue that Starbucks may need to address in the future.
This paper will evaluate the retail environment and service provided by the Starbucks
coffee shop located in central Durham and subsequently suggest recommendations
for improvements.
Retail environment evaluation
The stimulus, organism, response (S-O-R) model was originally formulated by
psychologists Mehrabian and Russell (1974, cited in Chen et al., 2022), who
explained the effects of environmental stimuli on consumer emotions and behaviour.
Belk’s (1975) taxonomy classified situational dimensions of the ‘servicescape’ which
are physical surroundings, social surroundings, temporal perspective, task definition,
and antecedent states. The physical surrounding refers to the most obvious features
of a situation (Belk, 1975). For instance, in a physical shop, these features can
include decoration, sounds, lighting and scents (Chen et al., 2022). This section of
the paper will concentrate on evaluating the retail environment of the central Durham
Starbucks based on the two theories mentioned above.
The following observations regarding Starbucks’s retail environment are based on
both first-hand information and secondary information gathered from the internet.

The Durham branch of Starbucks is decorated in warm colours and contains
predominantly wooden furniture complemented by soft and warm lighting, as
demonstrated in the photograph below which was taken in the store. Jang and
Namkung (2009) found that the interior design, layout, colour and lighting of a
restaurant created positive emotions in customers and that these emotions had a
positive impact on customers' behavioural intentions. The combination of warm white
lighting with warm accent lighting (orange) can create a comfortable atmosphere
(Kuijsters et al., 2015) and the use of more saturated LED lights results in a less
stressful, more comfortable environment (Wang et al., 2014). Since the lighting
design utilised in the Durham branch of Starbucks creates a comfortable and lively
environment, according to the theories above, it can be considered to assert a
positive influence on their customers.
Source: https://goo.gl/maps/2KUj7ak7aEKT7Z8a8
Moreover, the ceilings in Starbucks are higher than those commonly found in homes
and offices which may contribute to increased creativity and concentration. Research
at the University of Minnesota found that spaces with higher ceilings promote the
concept of 'freedom', while spaces with lower ceilings promote the concept of
'restriction' (Meyers-Levy and Zhu, 2007). The Starbucks store has been intentionally
designed to engender a sense of ease and comfort in their customers.
Finally, the store’s aroma should be noted since the smell of coffee often emerges as
one of the most pleasant scents (Ayabe-Kanamura, 1998, cited in Spence and

Carvalho, 2020). The review from Rimkute et al. (2016) concluded that scent could
influence customers' perception of the retail environment, their satisfaction level, the
time spent in the shop, impulse purchasing and so on. The scent in Starbucks could
affect customers positively.
However, not all perceptions of the Durham Starbucks store are positive, for
instance, there is no background music, and furthermore, it has been described as
noisy. One online review site (RestaurantGuru.com, 2023) criticised the shop for its
noise levels with one reviewer saying: "very noisy still cos even those students not
working sitting for long time cuddling cup of coffee and talking forever”. Baker et al.
(1992, cited in Jang and Namkung, 2009) argued that music is a positive cue that
stimulates mood and behaviour in the environment. Moreover, Spence and Carvalho
(2020) suggested that auditory factors such as music affect the customer's coffee
experience. The absence of music and the unpleasant noise levels in this store could
affect some customers' perceptions of the retail environment and consequently
negatively impact their consumer experience.
Secondly, the store's layout makes the queuing and waiting areas crowded and
untidy. The space where customers have to wait together to receive their drinks
orders is relatively small and confined when there are no seats available. One
customer commented on the online review site - RestaurantGuru.com (2023) that
"they had a mess of stuff blocking chairs and making the place look untidy ". This
cramped layout will also negatively affect the customers' perception of the store.
To summarise, the physical features of the retail environment offered by the Durham
branch of Starbucks, such as the aroma, the decor, and the lighting, are pleasing to
customers and create a cosy atmosphere that positively influences their response.
However, the noise, layout and no music of the store detract from the ambience and
may negatively affect consumer perceptions.
Recommendations for improving the retail environment
Having evaluated the atmosphere created by the Durham branch of Starbucks, some
recommendations can be drawn regarding changes which would improve the store’s
ambience if implemented. This paper’s first recommendation would be to introduce

background music to the coffee shop. Appropriate music will enhance the customers’
perception of the shop's ambience and positively impact their experience. Mattila and
Wirtz (2001) suggested that the combination of olfactory and auditory stimulation can
increase impulse satisfaction. Thus, by coupling the pleasant, in-store aroma of
coffee with the addition of background music, the two would work in harmony to
enhance the retail environment. However, the choice of music played is vital since
different music can influence the customers' choice and perception of the coffee
shop in different ways (Gater, 2010, cited in Spence and Carvalho, 2020). Research
by Hultén (2017) demonstrates that lounge music contributes most effectively to a
positive atmosphere as well as positive emotions for consumers in coffee
departments compared with classical and epic music. Thus, Starbucks also should
select their background music carefully in order to best enhance the atmosphere of
the store.
A further recommendation for improving the retail environment in the Durham branch
of Starbucks regards the store’s layout. By improving the store’s design, the spaces
could be more clearly delineated, thus creating a tidier, more organised and less
crowded impression.
In conclusion, by playing suitable background music and altering the store’s layout,
Starbucks could substantially improve their retail environment.
Service
The flower of service model is a marketing concept that recognises two types of
service that organisations should provide to their clients namely core services and
complementary services (Hashem, 2018). Furthermore, in relation to these two types
of service, the core service refers to the outcomes and consequences of purchasing
an item for which the customers expect to pay a fee, whereas the supplementary or
complementary service refers to a set of services that facilitate or enhance the use of
the core service (Goyal, 2004; Wirtz & Lovelock, 2016). Lovelock’s theoretical model
classifies supplementary services into eight categories: billing, payment,
consultation, safekeeping, information, order-taking, hospitality and exceptions
(Lovelock, 1995, cited in Ahmad et al., 2022)

The subsequent section of this paper will primarily evaluate the service delivered by
the Starbucks store in Durham, taking into account the flower of service model.
Starbucks’ service in general is thorough and warm; however, the Durham store
exhibits some shortcomings.
With regard to their core service, Starbucks’ mission statement reflects their desire,
“To inspire and nurture the human spirit of one person, one cup and one
neighbourhood at a time” (Starbucks, 2023a). The food and drinks they serve are
delicious as is evidenced by numerous customer reviews, for example one online
reviewer appraised their experience as, "A bit dear with the prices but great food and
drinks. Would recommend eating here" (Google.com, 2023). Thus, Starbucks’ core
service is evidently good and provides consumers with a positive experience.
So far as supplementary services are concerned, information plays an important role
in the customer experience. Starbucks manages multiple channels to keep
customers informed about their products and services, the main channels being their
webpage and application, which provide information such as store locations, opening
hours, menus and so on. Furthermore, Starbucks’ informative channels are easy and

convenient for their customers to view and search. Starbucks in Durham offer a full
menu for customers to refer to and the application also provides complete data about
the drinks, including ingredients and calories. This information helps customers to
differentiate between the various drink options. The Starbucks website is even more
comprehensive and not only includes more in-depth information than is available in
individual stores but also helps customers understand more about the brand's
services and philosophy.
Consultation is another essential supplementary service and Starbucks staff are
trained to advise consumers on the products available and assist in customising the
service to meet their needs. The in-store advice is both expert and timely; however,
the guidance provided on the Starbucks’ website is cumbersome. In order for a
customer to contact Starbucks, they need to complete a form on Starbucks’ official
website and wait for a response (Starbucks, 2023b). Consequently, should this
lengthy contact process result in customer problems not being resolved in a timely
manner, the outcome may be increased negative customer reactions.
Starbucks has developed many channels to handle order-taking. Customers can
purchase the products they want through the Starbucks app, via delivery applications
such as Uber eat, and Just eat, as well as by ordering in-store. Starbucks also offer
membership cards which allow customers to accumulate points and receive
complimentary products with their purchases, as well as offering a menu containing
a wide range of food and drinks. Moreover, Starbucks is currently enhancing their
mobile-ordering technology to make it easier for customers to both place orders and
to predict when they will be ready, as well as simplifying the way in which partners
serve mobile-order customers, thus rendering the process more efficient (Starbucks,
2022). However, there are many negative reviews regarding online ordering from
Starbucks in Durham. Just-eat.co.uk (2023) reported that consumers received their
beverages cold and badly packaged with one reviewer commenting that "Two of my
drinks had spilt all over the bag to the point of being nothing left in the cups".
Furthermore, the reviews revealed consumers complaining about missing items. In
this case, one review stated, "Missing the reusable cup" (Just-eat.co.uk, 2023).
Starbucks' ordering service is excellent when it occurs in store; however, reviews on
delivery platforms report a more negative customer experience.

Moreover, the design of the Starbucks online ordering system remains flawed. Whilst
it is convenient for customers to order products, there is no function for them to leave
messages regarding their orders on the application ordering page. Thus, consumers
are unable to customise their drinks to their personal preferences. For example, the
application does not allow customers to choose how much ice they want or if they
only want half a pump of syrup, the app only allows them to choose a whole pump.
As the picture below, taken from the Starbucks application, demonstrates, this
inability to leave messages has resulted in customisation remaining limited.
Source: Starbucks Application
However, with regard to hospitality, it is clearly evident that Starbucks offer their
consumers with comprehensive facilities. They provide customers with restrooms,
free Wi-Fi, comfortable tables and chairs as well as some magazines. Moreover, a
small table furnishes consumers with paper towels and extra drink toppings. As well
as catering for customer comfort, their safety is also considered with the provision of
a camera-based security system.
About safekeeping, the Durham store is not always well-maintained and clean.
Online review sites have highlighted this failing with one reviewer complaining that "I
didn't see anyone clean up" (Google.com, 2023). However, other reviews report that

the tables at Starbucks are clean and the staff are friendly, such as the review which
commented that the store was “Nice and clean shop with plenty to choose from. Staff
are friendly and helpful" (RestaurantGuru.com, 2023). This shows that the
maintenance provided by Starbucks is inconsistent, sometimes good, but not always.
In so far as the Starbucks supplementary exception service is concerned. They
provide all the supplementary information about ingredients and food allergies that
customers may require. In addition to mother and baby facilities, disabled care
facilities are also available, and Starbucks even offers dog-friendly spaces, making
their customer service even more comprehensive.
With regard to billing and payment services, Starbucks manages their billing process
with standard technology, i.e., digital terminals linked directly to financial institutions
with the invoice being generated after payment. Customers can choose to pay by
mobile phone or bank card.
Recommendations for enhancing service experience
Following the above in-depth evaluation of the service provided by the Durham
branch of Starbucks, the following section of this paper will offer recommendations
for its improvement.
Firstly, Starbucks could better monitor their service standards to avoid incidents
where the cleanliness of the store falls below acceptable levels. The maintenance of
their store could be improved by recruiting skilled people or raising staff standards
through increased in-house training. Since a clean store would clearly provide a
better service experience for its customers, it is vital that these measures be
adopted.
Secondly, Starbucks should improve the functionality of their application to allow
greater order customisation. This would increase the consumer’s range of choices
and satisfy their needs for more highly customised products. In response to the
negative delivery reviews, Starbucks could investigate extending their product line

and introducing alternative delivery procedures in order to provide a better
experience for existing customers and to attract new customers.
Conclusion
This essay briefly introduced the Starbucks brand and its possible future issues and
evaluated the retail environment and service provided by the Starbucks coffee shop
located in central Durham.
Starbucks primarily supplies food and drinks to customers accompanied by its
unique service level. The main target market for Starbucks is high-income adults.
Starbucks is likely to face three issues in the future: changing customer product
needs, evolving consumer experience preferences and requirements for higher
standards of service or quality. Starbucks may need to amend their drinks menu to
account for newly emerging customer needs and improve its retail environment in
response to customer preferences.
This paper evaluated the retail environment of Starbucks in Durham based on the S-
O-R model and Belk’s situational taxonomy theory. This Starbucks store provides an
environment that is generally pleasing to customers and positively influences their
retail experience. The warm lighting, decor and pleasant aroma of the store are all
attractive to customers. However, the lack of music and the untidy layout of the
coffee shop could have a negative impact on customers. Thus, this paper
recommended changes that Starbucks could implement in order to improve
customer experience. These recommendations included playing appropriate
background music to enhance the store’s ambience and altering the layout of the
store to improve the impression created for customers.
This essay also evaluated the service components of Starbucks in Durham with
reference to the flower of service model. Starbucks provides a complete service
package, from the moment the customer walks in and orders to the moment they

leave. The Starbucks in Durham provides a warm service to customers but does
nevertheless exhibit some deficiencies in the maintenance and store layout. This
store could offer a better experience for existing customers or succeed in attracting
new ones by strictly regulating service standards, improving the functionality of the
ordering application and extending the product line.
Overall, the retail environment and service provided by the Starbucks in Durham are
generally good, whilst still possessing some flaws. This particular Starbucks store
could be improved if the recommendations suggested by this paper were
implemented.

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