Starbucks back on top?

2 August 2010

Written by: Meghan Lodwick

Starbucks the coffee mogul, Starbucks the international meeting place, Starbucks downsized, now Starbucks the news distributor?

I can see the board room discussion that took place two years ago when Howard Schultz came out of retirement and reappointed himself as CEO.

‘We’re losing money and have closed hundreds of stores around the world,’  Schultz would have screamed across a long rectangular table.

‘The internet seems to have taken off, why don’t we do something with that?’ a pimply faced intern would have replied.

‘I like it! To the keyboards!’ Schultz would have said.

And that’s what probably happened. Since Schultz’s return, Starbucks has become the number one consumer brand on social media with over ten million friends on Facebook and nearly one million Twitter followers.

In fact, they decided to go a step further than the status update and on 1 July introduced free Wi-Fi in all of their US stores and a few in Canada.

This is not a new concept, free Wi-Fi is something people now expect from a café and most public places. The crumpled communal newspapers are being replaced by laptops and Apple gadgets.

However, it is the upcoming launch of the Starbucks Digital Network (SDN) that is changing the dynamic of the café.

Partnerships with iTunes, The New York Times, Patch, USA TODAY, The Wall Street Journal, Yahoo! and others are enabling Starbucks to offer otherwise exclusive content free to their in-store customers.

Paywalls on news sites such as The Wall Street Journal can be sidestepped upon purchase of a beverage and free downloadable music will be available through their deals with iTunes.

So their stores become downloading hubs. Not being able to find a place within the specialty coffee market has forced the company to give stuff away for free in order to get back on top.

As they filter information in their cafés to caffeinated consumers, they will no doubt reinvigorate their brand. Sitting in a café on a laptop for hours can equate to multiple purchases as one coffee does not fulfil hunger; only a muffin could tide you over til you’ve reaped all the benefits from the SDN.

Yet the perpetuators of the second wave of coffee may now have started the fourth. This network may very well turn the social part of a café into a point for connectivity, where we all stare at our screens, silently flicking through the web giving whole new meaning to the phrase ‘having a quiet one’.

Meghan Lodwick is a Master of Global Communications student at La Trobe University. This was originally published at her blog, For the Love of Beans!