About a year ago, I wrote a post about the opportunity for Starbucks to take advantage of digital signage in order to consolidate and upgrade the cacophony of messaging and offers in their stores. A year later, the thoughts still hold water. In an interesting and clearly unrelated development, Starbucks has recently been in the news for a couple of reasons related to digital media, none of which include digital signage. Strung together, the three tidbits of news leave me scratching my head. Let’s take a quick look at the news and try to figure out what might be going through the venti minds in Seattle.
On Monday at WIRED’s Disruptive by Design conference, Starbucks announced that it would provide free, unlimited WiFi access to all customers, dramatically broadening internet access in the stores from the current situation. In the same announcement, Starbucks also unveiled the Starbucks Digital Network, which will provide free access to paid internet portals in the Starbucks stores. The company even created a new division, Digital Ventures, to manage the new strategy.
On Tuesday, MediaPost contributor Augie Ray blogged about Starbucks’ venture (or misadventure) into monetizing Foursquare, the social media tool du jour. Ray details how Starbucks may have missed the mark with the promotion, and how similar actions by other advertisers may effectively kill the “Special Nearby” feature on Foursquare. The article provides quite a bit of insight into the early days of Foursquare advertising in general, and details Starbucks’ fast and aggressive move into mobile marketing.
The Starbucks announcement and their Foursquare campaign combine to provide some insight into the digital strategy of the coffee giant. The free WiFi and the Starbucks Digital Network seem to be all about making the Starbucks stores the “third place” between home and work. Where WiFi access used to be limited to 2 hours for non-AT&T users, now it is always on for all customers. That is certainly a good thing. The SDN appears to be an attempt to create a uniquely Starbucks online experience, providing content of value for free, through the device of the customers’ choice. This is also a nice gift to the denizens of the deep couches. The SDN won’t accept advertising, which makes sense as well. The objective of the WiFi offer and the SDN would appear to be getting people to spend more time in the stores. One would hope that would translate into greater frequency of visits and a lift in sales. Otherwise, it merely adds cost.
Here is my disconnect: in my experience, the large majority of Starbucks customers are transient. They come in, get their beverage and food, doctor it up, and leave. The folks in the chairs and couches are a combination of regulars who stake out their territory daily, random people meeting over a coffee, and folks who just want to sit down and enjoy their purchase before they jump back in their car. Most will appreciate the free WiFi upgrade. Some will avail themselves of the free boost over The Wall Street Journal’s paywall. But I don’t think either effort will change the experience for the in-and-out crowd. Starbucks continues to take the approach that to the extent that there are digital screens in their stores, those screens will arrive and depart with their customers. In-store communications and marketing will apparently continue to be chalkboards, printed signs and impromptu notices hot off the printer. The opportunity to provide a cohesive, dynamic and visually superior branding experience via a single digital display in each store does not appear to be on the radar. Letting the huge majority of transient customers absorb what they need to know from chalk and print is a missed opportunity to leverage dwell time, build brand and even encourage them to sit down for a while. Instead of investing in a digital signage network that might integrate with a Foursquare promotion (“The mayor of this location is _____ _____”), Starbucks appears to have leaped the in-store marketing chasm and gone directly to mobile marketing. Maybe I am jaded, but I don’t get it. Why create a unique online experience and skip over a unique in-store experience?
The WiFi and SDN programs, while both positive, seem to have an objective of extending the stays of those who choose to sit down, and to create a caffeinated online zone for those same people. The objective of the Foursquare promotion seems to be to get people to vie for mayor status in order to save a dollar. It looks like an attempt to increase the visit frequency of Foursquare users. Mr. Ray details why that may backfire, but the attempt has merit. I am not belittling any of Starbucks’ actions, but I am openly questioning how they can ignore the opportunity to use digital signage to pull it all together. For their own reasons, Starbucks may have determined that digital signage is not consistent with their objectives. Maybe it is the execution in coffeehouses by Danoo, Ripple and others that turned them off. Maybe they have run tests and been underwhelmed. Maybe they feel that the capital investment is too high. Or maybe they need to re-examine their objectives. I’d venture that selling more coffee, food and music would be objectives that shareholders would readily endorse. Digital signage would do that while extending every other marketing vehicle to the point of decision. It is a year later, but it is never too late.