This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Cities Need More Starbucks, Not CityTargets


These people "call" (FLWS) on Mother's Day. The florist has become obsolete, thanks in large part to its passive approach. It allowed itself to become little more than a distribution center for online business. It requires a dingy warehouse, not prime real estate in the heart of a thriving city.

Like every Starbucks that opens in Santa Monica, this one will draw a crowd. The company recently popped up 0.6 miles away from 11th and Wilshire, at Lincoln and Broadway, as part of a mixed-use development (retail anchoring apartments). And guess what? What was a once a run-of-the-mill corner, now has life. The tables on the plaza in front of the Starbucks always have people sitting at them drinking coffee and chatting among the city dwellers who have seemed to pop up out of nowhere.

Newsflash: They were always there. They have just had no reason to be public. Starbucks gave them one. It provided a venue for urban theater to unfold. Now they have a Starbucks -- and plenty other old, new and yet-to-emerge businesses -- that serve the several square blocks that operate as their neighborhood. In a relatively dense, walkable environment like Santa Monica, it's not overkill to have a Starbucks every half mile, even with other cafes and coffee shops in between. It's not even close to overkill. People live the day-to-day within very close proximity to where they live. Or at least that's the goal of many.

For as much as Starbucks contributes to the life of a city, it also stands out as an innovator in an otherwise dead retail sector. It provides an always-evolving experience that not only separates it from the pack, but creates the type of bond between consumer and company that only exists at a handful of other non-traditional retailers -- the Apples, Teslas (TSLA) and Lululemons (LULU) of the world.

Starbucks doesn't just talk about mobile and digital innovation. It delivers like a tech company. From its most recent earnings conference call on April 25 (via Seeking Alpha:

In Q2 we introduced new innovations and initiatives that further demonstrates Starbucks leadership in consumer card, loyalty and mobile payment experiences as more and more of our customers choose the Starbucks card as their preferred method of payment. Consider the following statistics; today, nearly one-quarter of all U.S. transactions are made by My Starbucks Rewards loyalty members and nearly one-third of all U.S. in-store transactions are prepaid.
Our mobile apps now have more than 10 million active customers and we are approaching 4 million U.S. global payment transactions per week, accounting for roughly 10% of total U.S. tender. To put this in perspective, Starbucks card tender now exceeds $3 billion annually in the U.S. and Canada, a scale that rivals many premier U.S. banks.

Go to a Starbucks in Manhattan; it's not an overstatement to say that almost everybody pays with the smartphone app. And Starbucks has merely reached the tip of the iceberg with regard to how it intends to evolve the mobile/digital experience. This is more than a coffee shop to many; it's a way of life. It's an ecosystem in the spirit of Apple, Amazon and Google (GOOG).

Target doesn't come close. It banks on notions of habit and necessity. When somebody comes along to further disrupt retail -- adding to the pain Amazon has already caused -- Target (and most of its peers), like the newspapers and radio stations that came before it, will be woefully unprepared to respond.

If you choose to not disrupt today, expect to be disrupted tomorrow.

-- Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.
4 of 4

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs