Sometimes Less Is More

Starbucks’ store closings fit in with the coffee retailer’s IT strategy. And if it means you have to wait a little longer for your latte, enjoy your surroundings.

So Starbucks is closing some of its lower-performing stores. Across the nation, java junkies, who will now have to walk six blocks instead of three to get their grande mocha latte fix, are venting feelings of frustration and betrayal. I’m as much of a coffee freak as any other journalist, but forgive me if I don’t feel a whole lot of sympathy.

Enough other columnists have expounded on the fact that even with the upcoming store closings, the ratio of Starbucks locations to U.S. citizens will still be about 1:6, so I’ll leave that angle alone. Today, I’d like to point out that closing stores dovetails nicely with Starbucks’ “less is more” marketing scheme, which is exemplified by the retailer’s in-store IT strategy.

Starbucks isn’t your neighborhood coffee joint. Cops, construction workers and retirees don’t flock there to scarf down a cruller and pick up the latest dirt on town politics. Through high price points, limited menu selection (which has been expanding in recent years, to the public dismay of CEO Howard Schultz), and yes, in-store wireless services, Starbucks has established itself as the “third place” for the more sophisticated set, a place away from home and the office to relax in a cozy atmosphere and experience the good life. A “Cheers” for people who avoid American lagers.

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The in-store wireless services play a bigger role in Starbucks’ carefully designed customer experience than most people realize. Even all-American McDonald’s has experimented with Wi-Fi in its stores in recent years, but when Starbucks first started rolling out in-store wireless hot spots back in 2002, it was a pioneering move. Critics wondered if customers really had any interest in surfing the Net while they sipped their cappuccinos. They also said Wi-Fi would encourage customers to linger over their laptops, preventing turnover and cutting into potential profits.

As we now all know, customers are very interested in surfing the Net while they drink coffee or perform most any other activity. Starbucks correctly predicted the mobile Internet explosion that occurred in the middle of this decade. Cell phones have become the new laptops, with people now literally carrying full Web access in their pockets.

And as for customers lingering while they surf the Net, that’s the whole point. Starbucks isn’t McDonald’s. It doesn’t make its money by shuffling customers in and out as quickly as possible. It makes money by selling a complete experience, even a lifestyle, which not everyone is going to—or is supposed to—appreciate. Walking into a Starbucks and having every available table seemingly occupied by a hipster cranking out the Great American Novel on their PowerBook is part of the experience.

By experimenting with making music and other specialized content available on its in-store Wi-Fi network, Starbucks is encouraging even more lingering. Dude, what’s the hurry? Aren’t you on flextime?

Naturally, not all—and probably not even most—Starbucks customers fit into the technohipster demographic. But that’s where the real genius of the retailer’s customer experience strategy comes in. For the price of a $4 coffee, you can vicariously live a lifestyle author David Brooks termed “BoBo,” or “Bohemian Bourgeois.”

And of course, most of the people who actually use Starbucks’ in-store Wi-Fi do not spend their days composing emo love ballads and posting to Allen Ginsberg Web forums. But since when has marketing been about reality? Most cigarette smokers aren’t cowboys and most beer drinkers don’t spend their lives on the beach surrounded by bikini models.

Don’t waste your time complaining about Starbucks’ store closings. They are as much a part of the customer experience as listening to an online snippet of Ray Charles music. You will still have plenty of opportunity to grab a Frappuccino during your morning break. Drink your surroundings in while you wait in line—they’re part of what you’re buying.

Dan Berthiaume covers the retail space for eWEEK. For more industry news, check out eWEEK.com’s Retail Site.

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