Starbucks will offer unlimited free Wi-Fi at 6700 US locations starting July 1, announced CEO Howard Schultz today in New York at Wired’s Business Conference “Disruptive by Design.”
Currently, AT&T mobile and DSL customers already get free access, as do patrons with a registered Starbucks Loyalty Card who receive the first two hours of their internet infusion free daily – everyone else pays $3.99 for every two hours. The new service allows unrestricted access with a simplified one-step login.
“People increasingly use Starbucks as a home office,” explains Buckingham Research Group restaurant analyst Mitchell Speiser. “Anything to encourage more people to come into the stores and buy drinks and food is good for consumers and the company.”
Additionally, a proprietary Starbucks Digital Network will be launched in the Fall giving “customers free unrestricted access to various paid sites and services such as wsj.com, exclusive content and previews, free downloads, local community news and activities” according to the Starbucks press release.
Launch partners include The New York Times, The Wall Street Journal, USA TODAY, Yahoo, Zagat and Patch, a local news service.
“Starbucks hit back,” said Chris Brogan president of social media marketing agency New Marketing Labs. “They said, ‘Not only do we have free Wi-Fi, but we’re going to offer this huge raft of digital products you can get while you’re here, and you like our coffee better anyway.’ ”
Laptop users at Starbucks currently average one hour of Wi-Fi use, which is expected to remain the same according to Stephen Gillett, CIO and general manager of Starbucks’ new Digital Ventures group. Videos and music clips on the service are intentionally short, he explains.
“We expect this to be a very versatile tool for people who are using Starbucks for what we call the third place, between home and work,” said Gillett.
The new service will act as a digital storefront as well, offering purchasable content and a share of revenue when a customer buys a subscription. Location based advertising is also expected to be an attractive revenue stream.
“If you have eight people sitting in a store for four hours on one cup of coffee, that’s not moving revenue,” describes Brogan. “However, if that same group is there for four hours on one cup of coffee and buys 14 songs, that’s sales.”
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