How Starbucks And WiFi Are Like Movie Theaters And Air Conditioning
from the wifi-frappuccino-please dept
Ever since Starbucks launched its paid WiFi several years ago, plenty of people have questioned the business model for cafes and restaurants charging for internet access. Plenty of other places, both independent retailers and chains, have found free WiFi to be a boon to their businesses, drawing in more customers and getting them to stay longer and buy more stuff. Supposedly some Starbucks managers have even begged the company to let them offer WiFi for free, because they think they're losing customers to other outlets, while an examination of the financial details of the program a couple of years ago didn't make it look like much of a money-spinner for the company or its WiFi provider, T-Mobile. With that in mind, the NYT had an interesting story over the weekend comparing Starbucks to the movie theaters of yesteryear, which saw air-conditioning not as something to drive up prices, but an amenity to offer as a competitive advantage. The story quotes the president of Panera, a chain of sandwich shops and bakeries, who says that the company isn't concerned with making WiFi a profit center, and that it helps fill its locations up during off-peak hours -- a claim it has been making for a while. He then points out, though, that Starbucks are generally pretty busy, so he wonders why they'd make their WiFi free (though perhaps he's using a little bit of the Jedi Mind Trick to ward off competition). Free WiFi would seem to fit with Starbucks' "third space" concept, which is supposed to make its stores a comfortable place between work and home, where people can (and want to) hang out for a while. Free WiFi certainly seems to be helping out plenty of other businesses, but it's hard to argue with Starbucks' success over the years. Still, you'd think that offering free WiFi would help fill the company's stores with more people, particularly during off-peak hours.