Power Struggles at Starbucks
If you’re not aware, there’s a quite entertaining discussion going on in the blogosphere re Starbucks and exactly what the brand should be providing to users. Coffee certainly, and biscotti without a doubt. But are unlimited electricity and available seating also implied in the brand promise?
The spark for the dispute has been a note in the independent Starbucks Gossip blog that some midtown Manhattan Starbucks units have taken to covering up power outlets in the customer areas in an effort to get laptop squatters to move along. Reportedly, the policy is being applied on a store-by-store basis at the managers’ discretion.
Basically the comments on the post, which went up in early August, break into two camps:
1. “I can’t believe Starbucks won’t do anything to shift these freeloaders and help me find a seat in which to drink my $4 latte. I’m taking my business elsewhere, never to return.”
and,
2. “I can’t believe Starbucks is so cheap that they won’t let me sit for a few hours and work on my freelance project while enjoying my $4 latte. I’m taking my business elsewhere, never to return.”
The company has long made it clear it wants to be everyone’s “Third Place”, a hangout that’s not home and not work. That’s why the free WiFi, and the deep chairs, and the perpetual music, copies of which are available at the counter. We seem to have reached a point where Starbucks’ customer loyalty efforts, so successful until now, may be turning inward on themselves and actually alienating some otherwise faithful customers.
If you position your retail outlets as an informal gathering place, do you have the right to be surprised if people start doing exactly that, getting comfortable and staying for a long time? Are unlimited electricity and a table on which to spread out also part of the implied Starbucks value promise? And how do you meter use of the space while alienating the fewest number of customers on either side?
Even the issue of Starbucks loyalty cards has been thrown into the argument. Many of the customers who’ve failed to find seats in their nearby Starbucks have noticed that the “seat-hoggers” are taking advantage of the free refills that come with buying a regular coffee using a registered Starbucks Card—in effect, renting three or four square feet of New York real estate for $1.73 with tax.
The level of the debate gets a bit childish at times. Someone mentions customers who nurse a single coffee for nine hours, and inevitably someone else asks how they know that customer stayed for nine hours unless they stayed for nine hours?
The argument even spreads to the worth of what the long-term sitters are doing with their laptops and free Wifi access. Commenters are tattling on people they’ve seen using their laptops not to study for a broker’s license or to write the Great American Novel but to play “Halo” or other massive multiplayer games.
While Starbucks may have decided to re-emphasize the quality of its merchandise and to play down the “living space’ aspect of its retail stores, the fact remains that it has gotten as far as it has in large part by offering customers an accepting, unregimented space in which to drink coffee and pursue whatever activities they choose, pretty much for as long as they want. Accommodating those varied needs has become part of the brand’s customer experience, to such an extent that Starbucks partnered with yahoo to offer its own branded content over its WiFi network.
And the availability of free wiFi at Starbucks has pretty much driven the adoption of the feature not only at independent coffee shops but at quick-serve places like McDonald’s and, most recently, Taco Bell .
But in urban markets like New York or in college towns where the local Bux presents an attractive alternative to the campus library, Starbucks may find it has to make some branding decisions.
The trick will be to find some path that lets it satisfy lingerers without alienating the more casual customers who may have a greater lifetime value– at least when calculated by spending per in-store hour.







