Ubiquitous coffee chain Starbucks has announced that it will implement free wireless at all its U.S. company-operated stores by July 1. Appearing at the Wired Business Conference: Disruptive by Design, Starbucks CEO Howard Schultz discussed "how the company sought to embrace social and digital media and continues to look for new ways to bridge the third-place coffeehouse experience with the digital world," the company said in a news release June 14.
"Building on the WiFi update, Schultz also revealed plans for a new online customer called the Starbucks Digital Network, experience in partnership with Yahoo, which will debut later this fall. The online experience, available only in U.S. company-operated Starbucks stores, will ... [allow] customers free unrestricted access to various paid sites and services such as wsj.com, exclusive content and previews, free downloads, [and] local community news and activities, on their laptops, tablets or smartphones," the company said.
"Driven by Digital Ventures, a new business unit within Starbucks led by CIO and General Manager of Digital Ventures Stephen Gillett, the Starbucks Digital Network in partnership with Yahoo ... provides a new channel for customer engagement," Starbucks said. "Launch content providers will include ... iTunes, The New York Times, Patch, USA Today, The Wall Street Journal, Yahoo and Zagat."
As chain competitors like McDonalds have ratcheted up the sales pressure with more sophisticated breakfast offerings, premium coffee options and free wireless Internet, Starbucks is seeking ways to generate new revenue opportunities.
"If you have eight people sitting in a store for 4 hours on one cup of coffee, that's not moving revenue. However, if that same group is there for 4 hours on one cup of coffee and buys 14 songs, that's sales," Gillett told The New York Times. "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," he said.
In June 2008, T-Mobile alleged that AT&T and Starbucks were not living up to an agreement the three companies had reached over how Starbucks should transfer from its T-Mobile partnership to a new partnership with AT&T. The lawsuit, in part, concerned a section of the contract that would allow Starbucks Rewards members to receive 2 hours of free WiFi per day. The lawsuit was resolved within a week.