Opening a new coffee shop isn’t terribly difficult in and of itself, but opening one with a competitive advantage that allows it to thrive rather than be flooded into the local market is a challenge that requires planning ahead. However, there are several proven routes to competitive advantage that coffee shops use, and one may be successful for yours.
Quality differentiation
The quality of your products can convert those who currently drink at other establishments to yours and hook those who might be one-time visitors to return. To ensure high quality, you must verify quality at every step of the service process, from the sources of your coffees and other products, to the systems, staff and equipment you use to store, grind, prepare and serve. You may need to have unique or unusual sources for your products so that you don’t compete closely with other stores that share the same suppliers. Researching vendors may be the best method for this type of advantage, unless you have a specific talent for developing your own products that will make your store stand out.
Experience Differentiation
Some retail stores recognize that the experience of the visit is a compelling differentiation for customers, regardless of the products sold. By offering a specific atmosphere, theme, or entertainment, your store can stand out even with relatively standard products. There will be costs associated with any unique environment you try to create, so be sure to research these and show how it will allow you to charge a higher price or attract more customers than you would otherwise.
Price differentiation
As you reach lower and lower prices for a basic cup of coffee, your store can tap into a much larger market by converting users who would brew their own coffee. However, once you aspire to be one of the lowest priced coffee shops in your neighborhood, it can be hard to find other ways to set yourself apart from the pack. Although you will recoup some of what you lose in dollars per customer in volume, you will probably have little money to play with and try unique marketing or décor to build a brand, and you will always be afraid of direct price competition from both independent stores and chain stores. They try to serve low prices too. A differentiation pricing strategy will work best for you if you have a unique way to substantially lower your costs, leaving more room for profit or branding.
