Coffee With Ian

A physical approach to virtual networking.
Nov 16

Starbucks Digital Network is NOT Legendary Service…

As a one time Starbucks barista, I like to see my former employer do well.  The company has faced some hard times in the past years with the stock falling, the decrease in sales and the loss of buzz.  Starbucks was cool in the late 1990s - mid 2000s.  What happened?

Starbucks has launched the Starbucks Digital Network, which includes exclusive audio, video and print content for customers (and non-customers) when using the free wifi in their stores.  While this may create value for the content providers who are on this network (Yahoo and Apple are part of it), and create new revenue for SBUX, it may be quite damaging to attracting and retaining new customers to its stores.

For one thing, the increase of consumers with wifi-powered devices has exploded.  Smartphones, netbooks and iPads have joined laptops as accessories that continue to create one damaging scenario in Starbucks locations:

The typical customer cannot get a table to enjoy their products.  Many tables are dominated by people who spend hours on their laptops, with their free wifi, and not buying products.  Of if they do, its not consistent with the amount of time spent hogging a table. Similar problems exist with long bathroom lines, with a frequent stream of non-customers taking away from the customer experience.

The liberal acceptance of non-customers is actually a part of the vision of company founder Howard Schultz.  As a “third place”, baristas are encouraged to treat every person who walks in the door as a customer, whether they buy a $5 latte or ask for a free cup of ice water.  However, as business has fallen, the non-customers have started to push out those who otherwise would be paying customers.  Premium online content is not a way to increase sales and profitability…