Does UX Still Matter In Tough Economic Times

A good user experience should encourage people to buy a product or use a service. Because it is both different and memorable, a well designed user experience  should motivate people to choose one product or service over potential competitors. Why then, doesn’t it seem to be working for Starbucks right now? If what made Starbucks great was its delivery of a great user experience then why is Starbucks struggling? Has the company gotten away from offering its coffee experience or is it just the economy? The answer may be a combination of factors.

An article about Starbucks suggests that both the rise and downfall had much more to do with economic factors than the design of a better coffee experience. The article goes so far as to say that Starbucks is a leading indicator for the broader economy. Here’s the short story. Go back to 2006 when Starbucks stock was at its peak and its expansion seemed unstoppable. The real estate market was on fire. The stock market was on the rise and a 14,000 Dow was not unthinkable. With more money in their pockets and a positive economic outlook people looked forward to Starbuck’s affordable luxury. Fast forward to 2008 and Starbucks is a much different company. Fewer stores, fewer variation in the product line and fewer customers. McDonalds is picking up business with their cheap – no UX – coffee. When it comes to the difference that UX can make, are all bets off during a recession? Does cheap trump experience when times are tough?

Not according to Jonathan Picoult, a UX design consultant. In an article in which he asks if “the experience economy is contracting towards irrelevance”, Picoult also asks how it is that Starbucks, a model for the experience economy (a reference to the 1999 Pines and Gilmore book), is operating far below expectations, and asks if this signals that the UX concept is not impervious to economic downturns. The answer to the question of relevance, for Picoult, is a definite no. While he acknowledges that experience-focused organizations are susceptible to the same economic cycles as industrial and service firms, he advocates that now is the time to stay focused on experience building.

Here are three reasons. First, while it may be necessary to scale back on an ambitious UX plan during a recession, there’s no reason not to expand efforts to enhance the personalization of services. This may be the best time to connect with customers. Now that they’re not getting their gratification from acquiring material objects, good experiences don’t necessarily cost them anything and they’ll appreciate it. Second, bad customer experiences actually end up costing the organization more because they waste time and require extra work to make up for foul-ups and problems. Moving the organization towards a total customer experience may actually improve the bottom line while keeping the user community happy. Third, user experiences and the design of them is a low-tech proposition. This is hardly the time when organizations will be investing in costly new technology. Creating great user experiences will be far less costly than adopting new hardware or software systems.

So even though Starbucks, the poster child for the user experience, is performing below expectations during the global economic meltdown, it doesn’t mean that the entire experience economy concept is a failed idea. It does tell us that user experience design is susceptible to setbacks. And other analysts have pointed to a rash of problems, such as moving away from the idea of differentiation when they made moves to compete with Dunkin Donuts by adding breakfast sandwiches and lower priced coffee options, that have effected Starbucks bottom line. It is possible that the best Starbucks’ strategy is to stick with the experience model, and to retain their core of loyal customers. Starbucks may actually be exploring new directions by trying to create an entirely new and different instant coffee experience, which CEO Schultz described as “not your mother’s instant coffee”. I agree with Picoult that promoting the user experience is still a good strategy – even in recessionary times. And for libraries that will be forced to trim book collections, eliminate an expensive database or two, possibly reduce staff or hours or implement other retrenchment measures, enhancing the user experience seems a logical and not too risky or costly way to stay connected to the user community.

9 thoughts on “Does UX Still Matter In Tough Economic Times”

  1. It’s not that Starbucks has a user experience and McDonald’s doesn’t, it’s that they have two different experiences. McDonald’s took an opportunity and researched the current market customer experience and found a hole. Their experience is in providing decent coffee at a low price and they considered cup design, marketing, graphic design, and price as the whole package.

    Starbucks’ problem wasn’t that they had a “user experience”, it’s that they didn’t continue to research and evolve that experience based on the economy and consumer interest. User experience is necessary regardless of the economy because it is not “frills” vs “no frills”, it is a good experience based on user behavior, interest, desire, and motivation.

    It bothers me that there are articles referring to the experience has a “has” or “doesn’t have” situation.

  2. I’ve never claimed to be a UX expert – only a student of this field, but based on my understanding of The Experience Economy (book), McDonalds would not be described as a firm with a user experience. Sure, they have a brand and their cups have a certain design, but I would say the key factor is that they lack differentiation. McDonalds is competing primarily on price, not the offering of a unique experience. Starbucks has competed not on price but on the ambience of their stores, the specialization of the drinks, the quality of the relationships between the employees and customers, etc. Did you ever go into McDonalds for coffee and have the person behind the counter know your name…know your preferred drink…offer to help you get to your car with your drinks…? Of course everything is an experience. By its nature an experience is reacting with the environment. So yes, technically you could say that McDonalds offers an experience. But is it a user experience as described by folks such as Nathan Shedroff or Peter Merholz? No, I don’t think so.

  3. The risk of saying McDonald’s lacks a “user experience” is the resulting assumption that means anything no or low frills doesn’t deserve user/customer research and I am quite sure McDonald’s invested research dollars on their new coffee branding. Maybe it’s market research but that research created a design that goes beyond the cup. Just looking at their advertising shows that it’s a different experience, not “no experience”.

    We may agree to disagree on this one, but I do believe your post is well written and researched. I just don’t agree on the “no experience” part. Minor detail. 🙂

  4. I think you have confused ‘user experience’ with ‘customer experience’ and forgotten the important semantic differences. In the Starbux v McD’s points, it may be better to think about how small or large the UX may be defined. For example, you could define the McD’s customer’s UX as the stuff related to the person sipping the coffee and all the factors involved in the experience: the liquid temp, the feel of the cup, the flavor, body, aroma, spill-resistant lid, security of the lid, etc. If the UX is defined in terms of this relatively small moment in time when the user interacts with the product, you can understand how very different it is from a very broadly defined UX. e.g. finding a parking space, browsing, ordering, paying, waiting, prepping, relaxing, exiting, etc.

    I tend to think that Starbucks deals a whole lot more with the emotional design of the customer’s experience than McDonalds.

    stevenb – you should hang out in a McD’s for a morning and watch the senior citizens who regularly frequent the establishment. They often have their social networks tied to the McDonalds experience — meeting for coffee, reading the paper, eating before a walk around the mall. They know the names of the people behind the counter and vice versa. They’re comfortable, sometimes walking up to the counter and saying “I’ll have the usual.”

    You must be ‘off your rocker’ if you think UX doesn’t matter as much in tough economic times. I’m glad that you and Picoult think the relevance is even more important given the difficult times. Mark Hurst’s ‘Bit Literacy’ essays might be a good related read for anyone thinking of cutting costs in library systems — they bring forth the idea of pushing atoms vs pushing bits — the activities libraries do all the time.

  5. Thanks for your comment Chris. Good point about Starbucks focusing more on the emotional or psychological design. But your senior citizens at McD example suggests to me that it is the senior citizens themselves that are creating their own experience – as opposed to McD designing a systemic experience for senior citizens. I would be surprised if the crack UX team at McD (if they have one) would design an experience targeted to a population that will come in and buy one cup of coffee (and maybe and egg mcmuffin) and stay for hours and hours talking to their friends (which by the way I have observed at McD – as well as homeless people doing the same at other McD outlets). The McD mission is not to be a hang-out cafe like SB. It’s all about fast food – that’s their primary customer. Get in, get it, get out – fast!

    If you want to talk about a designed experience at McD, I’d suggest you look at the other end of the age spectrum. McD has designed a much better experience for children – box meals, playgrounds, toy giveaways – and a place where families on a budget who don’t have much time can eat quickly and cheaply – but not necessarily nutritiously.

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