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Third Places and Neighborhood Entrepreneurship: Evidence from Starbucks Cafés
- pessimizer 2y agoOr alternately, neighborhoods with no previous coffee shops where Starbucks start opening are gentrifying.
- candiddevmike 2y agoIs Starbucks good at predicting gentrification? Presumably there is some criteria someone is using to gauge the feasibility of a location vs others. If you can beat the rush, you can probably get better leasing terms etc.
- financltravsty 2y agoLook at demographic data & data that correlates with it. The Census and related organizations offer very fine-grained data (both in characteristics/factors & in level of specificity of location). In the past, I had built a data brokerage offering clean and centralized data in this area -- the equivalent of Netflix for data catalogs (back when you could say this with a straight face). It is not a hard problem. You can (and many did) throw entire datasets at a random forest as a first-pass, and then retrain with only the features that pass a significance threshold. Algorithmic identification of real estate investment opportunities for the purpose of corporate expansion is not a new thing. Most serious shops do it. The techniques are simple, but it's the prep and decision-making after that are difficult.
- bensterne 2y agogood point
- sfink 2y agoThat was my first thought, too, but that's not totally ignored. It all hinges on this part: "...when compared to census tracts that were scheduled to receive a Starbucks but did not do so..." So the sampled population is the neighborhoods that were scheduled to receive a Starbucks, and lack prior other coffeeshops. Which means we're basically only looking a newly gentrifying neighborhoods (that Starbucks has calculated are worth opening something in, but that's probably mostly redundant with "newly gentrifying"). This severely limits the scope of applicability, but is fine in terms of the statistics. The big question is: why did some locations not receive the Starbucks they were "scheduled" to receive? Because that is a potentially huge confounding factor. If it's because Starbucks corporate said "hey, we only want to open up 2000 new locations this year, let's roll dice to see which ones get it", then it's all good. If (as seems more likely) it's more like "let's start the process for all candidates, but drop the ones that are slowest to get through the permitting process or hardest to get a loan/insurance/workers/supplies/building materials for", well then -- might those affect the ability to start up a company just a wee little bit? I'm torn. It's an interesting enough result that I'd almost like to go to the extreme measure of doing the "actually read the paper" thing that I've heard rumored some people do. And yet, my cynicism says my doubts are probably correct, so I don't want to bother with the effort to find out if they aren't.
- willsmith72 2y agoTo me, the "compared to census tracts that were scheduled to receive a Starbucks but did not do so..." is a weak défense against the correlation argument. Like you said, without knowing the why of the change in plans, there is no way to judge causality confidently. Anecdotally, I love these types of cafes (not "Starbucks" but this model), hope we get more, and see huge benefit both for myself and the community.
- knowaveragejoe 2y agoHow do we get the good parts of gentrification without the bad? Is avoiding the bad really worth freezing an area in amber?
- Ekaros 2y agoIs there good parts? Then again this forum is for those doing the gentrifying. So maybe it is wrong place to ask...
- Nasrudith 2y agoDepends on if you are a part of the crime rates that go down or not. More seriously: lower crime, more services, reduced infastructural and service strain, higher income, and an area made more desirable. The very hard part would be getting only the good, to bring in investment and raise incomes of individuals across all individuals at a neighborhood level instead of just importing richer people. The levels of sudden life changes required frankly suggest mind control being involved.
- deleted 2y ago[deleted]
- knowaveragejoe 2y ago"Importing richer people" is just one part of it, you're also freeing up housing elsewhere which allows greater upward mobility there. Their income also brings more opportunity with them.
- amanaplanacanal 2y agoGentrification is good for you if you own property there. If you are a renter, not so much.
- FooBarBizBazz 2y agoIME, Starbucks is one of the last coffee shops to come in during a gentrification wave, not the first.
- parpfish 2y agoYeah, Starbucks is hated among the cool artist types that are the early wave of gentrification.
- vcryan 2y agoI thought people stopped going to Starbucks
- lotsoweiners 2y agoMy experience at the Starbucks at the Bellagio a few weeks ago tells me your assumption may be incorrect.
- fragmede 2y agoNo one goes there anymore, it's too busy.
- deleted 2y ago[deleted]
- asdff 2y agoSome of the starbucks clientele have some interesting behaviors. There is a drive thru/walkup location where the drive through line pours out into the street as people park, walk up, get their order (perhaps a mobile order), leave, drive away, while the drive thru people scarcely moved forward in line. The drivers just sit there in line with their phone 1 foot from the face and inch forward on periphery vision alone. The entire ritual must be deeply habituated at this point, tick tok coupled with a stimulant. They probably have no idea how much time has actually passed.
- Nasrudith 2y agoYour demographic may have stopped going there but Starbucks is still intact as a company.
- trollbridge 2y agoUnfortunately, Starbucks is opening “kiosk only” locations with no seating that, obviously, fail to function as a third place. My partner finished up a medical appointment and was waiting for me to arrive, and decided to stop in Starbucks. Oops, just a kiosk. The options left for a “third place” was a petrol station that had seating and a grocery store. Somehow I don’t think petrol station seating areas will promoting a huge amount of neighbourhood entrepreneurship. I would probably look at more independent, locally-owned kind of establishments—particularly that do have seating. I can think of a lot of critical meetings that happened in these sort of coffee shops, including a first interview for the person who is now our staff software architect, the first meeting I had with my now-business partner where we went over her product idea (admittedly that was a Starbucks), getting together to hash out ideas to solve difficult problems, and best of all, a random chance encounter because we were in a third place. This is in places as diverse as small heartland American towns, NYC, Tel Aviv, or Pennsylvania’s rust belt. Fewer of these places means fewer of these good things happening. I don’t need a kiosk; I have an espresso machine I can operate at home or in the office.
- lotsoweiners 2y ago> I don’t need a kiosk; I have an espresso machine I can operate at home or in the office. You would probably enjoy the experience of a small, locally owned coffee shop then. Starbucks is optimizing for their profit. In my suburban city, Starbucks has closed most or all locations that were a few miles from the freeway. They built new locations with drive throughs and very little to no seating within a few blocks of every freeway onramp. This tells you what they are optimizing for. Unfortunately, chances are encounters and warm fuzzies do not please the corporate overlords.
- s1artibartfast 2y agoThe locally owned coffee shop is optimizing profits too, just going after a smaller, more niche demographic. Inversely, if everyone wanted cozy shops, that is exactly what Starbucks would build.
- 2y ago
- firecall 2y agoI've noticed students working in the IKEA Cafes here in Australia! They offer similar benefits to a good sized Starbucks store. Free charging points, WiFi, bench seating in secluded corners and so on. Though I'd wager that WiFi is less important, as people have mobile plans with plenty of data. Given the accommodation crises in Australia, I'd suspect many students dont have a decent place to study in their homes. Many of them are sharing bedrooms etc..
- m463 2y agoLol. I wonder if ikea cafes are similar to the restaurants in ikea. I was under the impression they were subsidized. Additionally, they are a "trap" - easy to enter, but exiting requires you to walk the gauntlet of products for sale downstairs.
- imp0cat 2y agoEvery IKEA might be different, so YMMV, but there usually are (sometimes well-hidden) shortcuts.
- graeber_28927 2y agoIKEA regularly shuffles around it's layout. They won't let you learn shortcuts and exploit experience. I learnt this the hard way several times in my local IKEA, but I also read an article about how this is absolutely strategic in their thinking. Unfortunately I couldn't find it to back me up.
- throwaway173738 2y agoThis is true. A lot of shortcut doors are very non descript too and they look like doors into some back room or warehouse you’re not supposed to enter. They do mark them on the store maps though. “You don’t have to be rich, just smart” indeed.
- daveoc64 2y agoIn the UK, the IKEA Restaurant offers free hot drinks for IKEA Family members on weekdays - plus all of the other benefits you've mentioned. I would say that the Wi-Fi is important, as the design of most UK IKEA buildings blocks mobile network signals!
- jmyeet 2y agoWhat I don't see in these conversations is how much increasing property prices contribute to killing third places. People get excited because they bought a house for $200k and it's notionally worth $800k now. In reality they haven't gained anything because every house is $800k and you still need somewhere to live so you still only own one housing unit of wealth. Worse, people actively lobby for policies that increase housing prices. But if this house is worth $600k more where is that money coming from? It's coming from the next generation who has to pay substantially more for the same house. It's a wealth transfer from the young to the old. How does this relate to third places? Well, imagine a neighbourhood cafe. 20 years ago that cafe space might cost $200k and have a commercial rent yield of, say, 5% so it would cost $10k/year in rent for argument's sake. Well, all property has gone up in value so that cafe's space is now valued at $800k. It still demands a 5% yield so that's now $40k/year. All the cafe's customers have to pay for that with increased prices. So with increases in housing costs, people have less money to spend and that money doesn't go as far. At a certain point, volume goes down and the business has to either close or raise prices, further exacerbating the problem. Rising housing costs are strangling every aspect of society.
- ec109685 2y agoThat $200k purchaser is sitting on $760k in equity and paying 1/4th in housing that their peers are, which is its own form of wealth.
- griftrejection 2y ago[dead]
- browningstreet 2y agoAnd then renting out for $3000/mo a thing that was renting for half that 2-3 years ago and isn’t even a good place to live.
- ssss11 2y agoAnd if they’re one of the wealthy that own more than one unit of home wealth they are most certainly cheering for the prices to go up.
- kbos87 2y agoThis is an aside, but my how far has Starbucks fallen at the hands of profit optimization. A Starbucks used to be a great place to spend time. Today the interior of almost every Starbucks is cold, beat up, and (intentionally?) uncomfortable. (In the stores where they even still have seating, which another commenter pointed out.) The quality of the product is barely a step above a gas station. On the other hand, my area has a few excellent locally owned options that are so important to me. When I think about Starbucks vs. one of those locally owned shops, it reminds me just how much a rich tapestry of small businesses in a neighborhood can transform it for the better. Starbucks had that going for a it for a short while.
- willsmith72 2y agoIt seems like everyone's experience is highly localised. Even within 3km of my place I have 4 starbucks. 1 is amazing, 2 are not great, and 1 is the takeaway variant. Which one is the true measure of "Starbucks"? It's the same for local cafes too. Also what's with the "they just want to make a profit" argument going round here? Why wouldn't they? They literally have a legal duty to do so. Should we instead incentivise cafes to not make a profit?
- davemp 2y ago> they just want to make a profit I think the “just” is the key word here. No one is going to get up in arms over modest profits. It’s the chasing growth at all costs even when it means sacrificing what should be the core value(s) of the business. A lot of franchises just end up as soulless real-estate/marketing plays that siphon money out of local economies and compete on axis other than actual value/quality.
- ipaddr 2y agoThat's a great way to go out of business. Just make a profit driven companies don't invest in the companies future. Starbucks had a vision now it looks to maximize short term profits while playing a real estate game.
- ETHisso2017 2y agoSounds like they need to split up the brand. Customers need to have a consistent experience across locations
- karmakaze 2y agoI thought the article would be from past years rather than June 2024. Nowadays, we're looking for a Second Place having chosen to lose the workplace and working from home. But I do get that 'Third Place' was the terminology.
- hug 2y agoIt's not that it was the terminology, it still is the terminology. About 20% of US workers are fully work-from-home. For the vast majority of workers, it still is a third place.
- deadbabe 2y agoThere’s a nice coffee shop near me but they have somewhat hostile policies toward people wanting to sit on their laptops and work for hours, which makes it hard to be a decent third place. On weekends, laptops are banned entirely.
- thundergolfer 2y agoPeople sitting on their laptops, usually with headphones, are actually themselves hostile to third places and that's why some cafes ban them on weekends. The definition of a third place is fully incompatible with it being just a remote work location: https://en.wikipedia.org/wiki/Third_place https://en.wikipedia.org/wiki/Third_place
- Haemm0r 2y agoFully agree. Just watched a episode of Friends yesterday. The cafe there could be the definition of a third place. ;-)
- asdff 2y agoFriends is very idealistic in a lot of ways. The closest thing to that experience in real life is a dirt cheap college bar, at least in the day I'm not sure if they are still like this. Everyone has nothing to do after doing the minimum of their responsibilities for the day so we'd just show up at the bar as soon as we could, and others would know to end up there soon as they could whether that be at noon with a backpack still on or around midnight. It was cheap enough where you could basically sit there and drink all day for maybe $20. That probably gets you a drink and a half today if that, and what do you know, no one's hanging out all day at these places because that could cost you $100 instead of $20.
- asdff 2y agoThe issue is that its a starbucks. I think if people are trying to hang out with their friends, at this point in 2024 they are not going to waste that moment of everyone's schedules aligning like the planets at merely starbucks. I hope at least. Not to mention the menu is basically optimized not to have you stay and hang out, its prepackaged or microwaved stuff, unlike most other local cafes where they will serve you hot food on ceramic dishware.
- yuzhun 2y agoI'm from a city in central China, where Starbucks is a great place to talk because it's located around a mall, and unlike other stores, the seating is less crowded, but if I want to study or get quiet to do something, I'll choose the library or a less lively local café.
- rafterydj 2y agoI am currently living in Japan after living my whole life in the United States. I have noticed Japanese Starbucks are much more generous with the space and seating, and generally are wonderful places to socialize/study/work. Additionally, I wonder if it is related to the prevalence of malls and their popularity. In the US, malls are almost universally graveyards, whereas in Japan every Aeon Mall I've ever visited has been full even on weekdays.
- spencerchubb 2y agoThe study basically compared neighborhoods that received a Starbucks versus neighborhoods that did not. What if Starbucks decided to open in those neighborhoods because of some confounding factor that suggested an increase in economic activity?
- spott 2y ago> We find that, when compared to census tracts that were scheduled to receive a Starbucks but did not do so There still might be a confounders, but they at least tried to control for that.
- vlovich123 2y agoExcept how do we know that the reason they didn’t do so was precisely because of that confounding factor? It’s a neat idea but leaves one wanting for better data
- spencerchubb 2y agoMakes me wonder why Starbucks planned to open there, but didn't... Maybe a weak economy in the area
- doytch 2y agoIIRC (I read this study a few weeks ago), they compared areas where a Starbucks opened; areas where Starbucks planned an expansion but were prevented by things like city planning snafus; and areas where Starbucks opened in non-traditional (eg low income) areas through their partnership with Magic Johnson.
- mettamage 2y agoWait, aren't third places public places? Like, squares or parks? I thought commercial establishments were second places.
- grokkedit 2y agothey are second places only if you work there, I think
- tqi 2y agoA second place is your office, ie commercial spaces where you are an employee
- downrightmike 2y agoNot really , no, squares don't really exist in neighborhoods, and parks are almost as rare.
- mettamage 2y agoNot in Europe, they exist. I'm from the Netherlands, you can find public third places.
- downrightmike 2y agoWhen I was in Germany, sure they exist, but they are rundown and crappy outside of city centers.
- abdullahkhalids 2y agoIndeed, we should at least differentiate between third places that you have to pay for or are otherwise restricted, and that you don't have to.
- boffinAudio 2y agoA generation of Americans have no idea what the commons is.
- m_mueller 2y agoTidbit about continental Europe: I think here this role is rather served by restaurants since people tend to have 1-1.5h proper lunches which get used a lot as networking opportunities to meet with interesting parties. Most of my LinkedIn messages are to set up lunch plans.
- deleted 2y ago[deleted]
- peanut_worm 2y ago“third place” is just starbucks marketing jargon. this article is an ad.
- viridian 2y agoMaybe at some point it was, but we are well past sbux owning the term. You can see for yourself, do a google search for "third place -starbucks" and filter down to results in the last 24 hours. You will still find news articles, reddit threads, etc, using the very same definition we are using here. I've seen articles in strong town use it, I've heard the term come up in meetings of my local pro-development citizen's organization, etc. Starbucks has no claim to the term third place, especially given that since covid, the majority of them don't even qualify as third places.
- ianburrell 2y agoThe third place is from 1989 book, The Great Good Place. Starbucks looks to have adopted it a while ago, at least 2008. But I have only heard it used by urbanists.