Starbucks creates opportunities for others

Starbucks charges a pretty penny for wireless access and they are doing the competition an enormous favor. If you are not up to paying starbucks a $30 monthly fee for wireless access, you can expect to cough up $6.95 per day to check your email. (cough! cough!)

This makes it easy for other coffee shops and small restaurants to attract customers by offering free wireless access. Offering free wireless access can be the determining factor in staying competitive in a saturated market.

Any business that needs more customers should consider what would happen to sales if they offered free wireless access. They don't always need to provide tables, all that is necessary are places to sit down or places to stand with a shelf to support a laptop.

Bookstores, museums, libraries, snack bars, and some retail stores might well profit from the extra traffic that free wireless internet access can bring. How about bowling alleys, barbershops, cocktail lounges, singles bars and pubs? This puts a new twist on old business models.

In my recent visit to Floyd, VA, I took full advantage of the free internet access offered by the Cafe Del Sol to upload posts. I was interested to see that my wife, Gretchen, wanted time to check her email once she saw how effortless it was.

Oddfellas Cantina is expecting to follow suit in the next few weeks. It will be interesting to see how it affects their lunchtime business.

Some experts feel that Starbucks will not be able to continue charging for access for much longer, but they have certainly established a pattern that is changing the way salesmen and other road warriors do business.  This NYT article by Katie Hafner suggests that free internet access builds customer loyalty as well as increased traffic.

Ubiquitous internet access will create a phenomena like the cellphone craze. Everyone will be online at all trimes. The increased speed of communication means that more business will be done in less time.

Of course, you may have already figured out where this is leading....to more stress and higher burnout rates, but that's the subject of a future post.

Comments

[Christopher Bailey]

David, absolutely agree with you on how certain perks (like wireless access) can build customer loyalty. Wish we had a locally-owned coffee establishment that offered wi-fi. As it is, Panera Bread does and they've become a familiar office away from home. Even if Starbucks does go free wi-fi, Panera still has them beat since they have free refills on very good coffee.

[David St Lawrence]

Starbucks is providing a pricing umbrella that allows smart competitors to establish a foothold with the mobile digerati.

Free refills and good service will keep customers coming back even after Starbucks folds their umbrella and provides wireless access at no cost to customers.

Your comment about Panera bread indicates that wi-fi access can broaden the customer base for many restaurants. One cannot ignore such an opportunity in the highly competitive world of fast food restaurants.

[Billy The Blogging Poet]

Indeed, I look to a future when I can blog from anywhere. (Next step: cash enough to buy that laptop.)

But I came here for your imput on Floyd. (You can thank Doug Thompson) I live almost three hours away in Greensboro, NC., but on the rare day I have away from the day job I've been known to drive to Odd Fellas for lunch then turn around and drive home. (Usually with a stop at Floyd County Drygoods to visit with Amy and buy homemade bread. Tell her I said, "Howdy!") I love everything about Floyd and wish I was there now.

[steven]

One thing that Starbucks and T-Mobile are offering, though they're not advertising it very well, is *stable* wireless. (Well, relatively stable, anyway.) Less than a tenth of a mile from "my" Starbucks is another coffee shop, Cambridge Coffee, with free wireless. We tried it one morning, couldn't get a consistant connection, and gave up. It just wasn't worth the hassle. Same ol' song... you get what you pay for.

[David Robarts]

I think that free wireless access will become more common. The unit price of such a perk is very low...yet the benefit perceived by customers is fairly high. There is potential for abuse, but that can be mitigated by limiting the time or bandwidth allowed. If you desire a longer connection or more bandwidth, then you have to pay for it.

[Doug Thompson]

David:

I subscribed to T-Mobile's Wi-Fi service for nearly two years to use in both Starbucks and Border's bookstores while traveling. During a prolonged trip to the St. Louis area in 2003, the Border's in Fairview Heights, Illinois, became my office for several hours a day (it reached the point where the counter staff in the store's cafe would bring me refills of coffee). It saved my butt during the 2004 elections.

I also used Panera's free service in the St. Louis area (their shops are called St. Louis Bread Company there) but the service kicks you off after 90 minutes.

T-Mobile's advantage was T-1 speed. Many of the free services in locally-owned coffee shops run off cable modems or DSL running at slower speeds (the service at Cafe del Sol in Floyd runs at 384K) but I think you're right that free services are a perk that will become standard fare at most coffee shops. We can hope.

BTW, the City of Roanoke offers free Wi-Fi in their downtown area (although it is time-limited). It even works on benches on the street and in plazas. Hopefully, that is something other comunities will consider.