Brandweek reports that Caribou is undertaking a major overhaul of the brand to expand its appeal.  The company has locations in over 15 states and leadership feels that the Midwestern-y, lodge image associated with their coffee is keeping consumers in some regions from connecting with the brand. With the help of Alfredo Martel, a former Yum Brands exec, some old Starbucks people and a new ad agency, Tattersfield is leading the way to a new identity for Caribou.

Tattersfield is making some pretty significant changes to the look of the logo that will hopefully carry through to the store.  What set Starbucks apart and drove their unbelievable retail sales and expansion, had less to do with the goddess logo and everything to do with their retail environment.  They introduced Americans to the coffee shop as a hang out and made each store a place where you want to spend time, meet friends and enjoy several cups of expensive joe.  In order for Caribou to drive their retail sales, they’ll have to dig deep on the rebranding of their retail environment.  It must resonate in a unique way to get the new brand message across. The look and feel of the brand is important, but the store brings it to life.

The latest reports from retailers who previously served as industry benchmarks are a somber reminder of the state of things. Starbucks is losing 43 kiosks that were located inside northeastern Stop & Shop and Giant grocery stores due to under performance. On the other hand, fast-food has gotten competative with McDonald’s, Wendy’s and Burger King all vying for the attention of the newly frugal.

Barney’s, the 86 year-old high end department store, may be back on the market.  According to Bloomberg, the retailer was acquired by a Dubai government-owned firm in 2007 and is now being eyed by Canada’s largest grocer. Debt and declining sales are pushing the company towards bankruptcy. Sak’s and Neiman’s have similarly struggled in recent months. Meanwhile, JC Penny’s invaded Manhattan and Sears is retooling the sales floor.

Here’s the question.  Are the days of rapid and massive growth over? Is that good news?? While consumers are becoming conservative savers, should retailers practice the same behavior? If so, how do they compete with middle market rivals who have been waiting for their big comeback?

Of the 28 elements that define a “wow” experience for shoppers, brand experience and engagement were “the strongest drivers of loyalty.” Among other things, brand experience includes the store design and atmosphere. Some retailers already understand the importance of infusing the brand into the store experience. Earlier on Inside the Aisle we noted Domenico De Sole’s belief that the store is the brand and the importance of that experience to the shopper’s relationship with his brand, Gucci.

Wharton’s study offered a caveat for store designers and planners — be careful of “projecting sameness.”  The research found that “shoppers reported ‘mall malaise’ — boredom with the similarity of specialty chain stores.” Starbucks is already heading this message.  Part of their new store design strategy includes redesigning stores to cater to the regional identities of their customers. Creating unique and varied shopping environments, even within a chain, seems to be an emerging trend that will benefit retailers in the long run.

Click here for a copy of the study results summary.

The strategy that made Starbucks famous was a focus on the retail environment. Rather than selling coffee in the traditional wam-bam-thank-you-ma’am fashion of most coffee shops, Starbucks created a retail environment where customers felt comfortable sitting and enjoying a cup of joe, or latte. Eventually the stores become a destination for meeting friends and kicking back over coffee.  Spend more time, drink more coffee. Howard Schultz, founder of Starbucks, says he was inspired by cafes in Italy that seemed to be more of a communal center than a retail store. Genius!

But in comes the recession and down goes the king. Starbucks has suffered tremendously due to the economic downturn and shopper retreat. Last week, they announced plans to introduce a new global store design strategy in an effort to get back to the basic strategy of infusing the store environment with the customer’s lifestyle. The new design strategy involves several components including redesigning and building stores to reflect the local market and emphasizing sustainability in store design. For instance, the redesign of their Pike Street location (not far from the original Seattle location) includes wood cabinets made of fallen Seattle trees, a community table re-purposed from a local restaurant and preserved columns, floors and ceiling.

There are some pros to Starbucks’ approach.  They are getting back to the thing that defined the brand — creating a unique experience.  Allowing some diversity in the store design, tailoring each shop to the local flavor, could generate interest in visiting different Starbucks locations. In addition to creating goodwill, the sustainability program will save the company money over time (although the initial outlay could be hefty). However, Starbucks has an uphill battle on pricing. They are now competing with McDonald’s, Dunkin’ Donuts and even Wendy’s in the specialty coffee arena and some say that the product is comparable. If you read through comments on the Seattle Post’s website, customers don’t appear to be impressed with the plan. At this point price is of much greater concern to the average buyer. We’ll see how they fair.

ABC News ran an interesting story on the coffee wars. Click below for video.