Big digital ambitions may be brewing at Starbucks |
Connect with TechFlash on our Facebook page for all the latest technology news headlines and commentary, plus information and access to special events, photos from events, promotions and more.
Starbucks' plan to start offering web content to store customers in the fall may mark the beginnings of a broader digital strategy for the Seattle-based coffee chain, analysts and observers of the company say.
Starbucks on July 1 began offering free, “one-click” unlimited Wi-Fi service at nearly 6,800 company-owned stores in the United States and 750 stores in Canada — a big change for a company that had previously capped free Wi-Fi at two hours and required people to log in with a Starbucks card.
As part of the new Wi-Fi policy announcement, Starbucks said it would launch its own “digital network” in the fall, in partnership with search giant Yahoo. The network, available free to customers using Starbucks Wi-Fi, will include news, local listings and job postings.
Starbucks hasn’t unveiled the new content offering yet, but some see it as the first step in what could be a more ambitious effort by the coffee chain to distribute digital goods and services.
If Starbucks succeeds in creating a compelling set of offerings for Wi-Fi users, that could make Starbucks more of a force in the technology industry, with implications for its workers, business partnerships and investors. It could also help the company draw more people to its stores and boost sales of coffee and food items.
“Starbucks appeals to well-heeled adults, and there’s a tremendous opportunity to get them to reach into their pocketbooks,” said Laura DiDio, principal at Information Technology Intelligence Corp., a technology research and consulting firm in Grafton, Mass.
Starbucks’ initial focus with the digital network is content. The coffee giant in June said launch partners will include The Wall Street Journal, The New York Times, USA Today, AOL’s Patch community news, Zagat restaurant reviews and Apple’s iTunes digital music store.
The company has said the content will include some material that would normally be behind an online paywall, as well as local news and listings and free downloads.
But analysts and others see Starbucks potentially using the network in other ways, from offering discounts and coupons to in-store customers to selling songs, video and even online games.
“If Starbucks doesn’t sell audio, video and casual game products via their digital network, they’re silly,” said Chris Brogan, president of New Marketing Labs in Boston. “Digital, done well, is powerful. Starbucks gets to add a brand allegiance to the mix, by saying, ‘If you’re buying this while in a Starbucks, the price is X.’”
Starbucks declined to share any new details on its digital network, saying it would reveal more information closer to the launch. Starbucks Chief Information Officer Stephen Gillett, who leads the company’s Digital Ventures unit, was not available for an interview. Gillett wrote on his blog that he expects the network to include “the best paid-wall content on the internet but available ad-free and at no cost to our customers.”
Starbucks is not the only retailer with free Wi-Fi. A host of other coffee shops — and rivals such as fast-food chain McDonald’s — have offered it for some time, and Starbucks is in some ways playing catch-up. But Starbucks is now seeking to outdo its rivals by building a proprietary digital network on top of its Wi-Fi service, which is powered by AT&T.
Some say Starbucks could use the new network as a powerful tool to promote its products and its brand, with contests and discounts, for example.
“Clearly the ability to offer some coupons within the store will be quite appealing,” said Augie Ray, a San Francisco-based senior analyst of social computing for Forrester Research. “I expect Starbucks will use this platform for some localized marketing.”
Starbucks has been exploring other digital channels lately. In May, the coffee chain introduced a discount associated with location-based social network Foursquare. Starbucks offered Foursquare users who achieve “Mayor” status at a Starbucks store — by checking in the most times — $1 off a milkshake-like Frappuccino drink.
Starbucks has also embraced Apple’s popular iPhone, releasing iPhone applications that help people locate Starbucks stores and use their iPhone as a mobile payment device in select stores.
Ray, the Forrester analyst, says Starbucks has to create compelling features or offers to grab people on the Wi-Fi network — otherwise people will just leave the Starbucks landing page and click to other sites.
“The onus is on Starbucks to capture people and not just be something they pass through on the way to checking their email or visiting Facebook,” he said.
Follow my updates on Twitter.
If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.
Who's creating today's energy efficient buildings? Find out at the BetterBricks Awards, Feb. 16
BetterBricks Awards salute the individuals leading the way for high performance commercial buildings with an emphasis on energy efficiency. Join us as we recognize these standout green building professionals.
Award categories include: Advocate; Architect/Designer; Facility Manager/Operator; and Owner/Developer.
Keynote Speaker: Kevin Kampschroer, Director of U.S. GSA's Office of Federal High Performance Buildings. Kevin leads the U.S. General Services Administration's efforts in building sustainability and accelerating industry adoption of sustainable principles across all aspects of a building's life.
Register here by February 10!
If you are interested in buying a table, email Monica Alquist or call her at 206-876-5404.
The Triple Door Presents: The Atomic Bombshells "J'ADORE!: A Burlesque Valentine"
Seattle's reigning Burlesque super-troupe delivers a gorgeous and glittering VALENTINE featuring some of the Bombshells' most exhilarating acts to date. J'Adore! promises to celebrate l'amour with good humor, style, and a healthy dose of dazzle! Bring a friend, a lover, a family member, or a secret crush, and celebrate with the Valentine's Burlesque spectacular that will leave you shouting: "J'ADORE......The Atomic Bombshells!" The incomparable Jasper McCann emcees with high style and charm.
Please visit www.thetripledoor.net for a full schedule of future performances.
The Triple Door Presents: Bob Mould – See A Little Light: An Evening of Reading and Music
"Bob Mould. Those two words are synonymous with integrity. From Husker Du in the last century to right at this moment, Bob is the real deal, writing and playing music for music's sake. He's a great songwriter and performer. I have been a fan of Bob's for thirty years now with no end in sight." -Henry Rollins
Please visit www.thetripledoor.net for a full schedule of future performances.
Why Choose BDO for your SOC (previously SAS 70) Reports?
BDO’s experience in providing attestation services (SAS 70/SSAE 16, AT 101, AT 201, AT 601, etc.) to a broad range of industries, and our team of skilled professionals distinctly qualifies us to serve as your company’s Service Auditor. By leveraging the BDO global network of control specialists, we are poised to provide global services in more than 1,000 offices and across 119 countries. Many organizations find that investing in reports on controls may result in benefits, including:
• Increased client confidence
• Improved competitive advantage
• Minimization of frequent audits
• Streamlined business processes and controls
• Enhanced risk management
For detailed information contact Paul Martini at pmartini@bdo.com.