More digital disruption examples in retail – Starbucks London stores jammed with people on laptops
Below is a now very common sight on any day at my local Starbucks on Kensington High Street in west London.
Most of the people in the photo below (11 out of 14 in view to be exact – click for a larger view) are on laptops, notebooks, tablets or phones (the guy at the bottom right is engrossed in his iPhone).
Contrast this with a shot taken in another Starbucks in London in 2007, with a sole person on their laptop and the corresponding post where I mused about the 3G dongle competing with WiFi that back in 2007 was anything but free in Starbucks.
For Starbucks, they are seeing some very real digital disruption. On one hand, they want to encourage people to come into their store, buy some coffee and food, sit down at at a table to enjoy it and then leave, and allow the tables to turn over every 20 – 30 minutes. The problem is the turnover rate I estimate would be around 60 – 90 minutes per table.
Now that Starbucks in the UK (and US) has free WiFi, it encourages people to visit, but the digital disruption piece is that people now want to stay for longer periods of time as they update their Facebook pages, watch videos or finish their latest University assignment.
In a way, Starbucks has become a physical and digital destination, where people meet, to then ignore each other as they are buried in their digital devices.
I am a regular at this Starbucks and I spoke to their local area manager some months ago. He shared with that this particular store has a problem with people staying all day on laptops.
The challenge is that they have set a precedent at all of their UK stores to provide free WiFi (which now seems unlimited – I used to get disconnected every 2 hours, now it stays on for the full session), so by limiting it at a particular store (or charging for it) would send the wrong message.
If they were to charge for WiFi (perhaps depending on your level of loyalty at that store), it would deter the laptop lurkers, and would provide more throughput for people wanting to stay for a shorter period and consume food and coffee.
Digital Disruption can provide positive benefits
On a related note, somebody explained to me that one of the real reasons for Starbucks accepting mobile payments at their tills was to actually reduce time in the queue to order and pay for your coffee.
One scan of your smartphone and you’re gone.
The faster payment time for those using their mobile app does help throughput, but the bottleneck then hits when the “laptop lurkers” hog all the available seats.
There are obvious loyalty benefits to mobile payments, although Starbucks still insist in sending me a postcard with my free drinks in the mail.
Digital disruption can come as a result of customer feedback
Moving from sending people a postcard with their free drinks to a more digital version is something the US stores are changing in the coming months, as it was the number one piece of feedback from customers.
Thankfully they have listened to this feedback, and more digital disruption happens as Starbucks is forced to move from their preferred (snail mail) method of distributing loyalty rewards, towards a more sensible (in my mind) digital method where the rewards get added to your Starbucks account and redeemed via mobile app at the till.
Digital disruption is happening everywhere, and for some companies like Starbucks, it may appear to be a digital bang rather than a gradual process.
Deloitte in Australia recently produced a report titled Digital Disruption – Short Fuse, Big Bang?” which gives a very solid view of industries at risk of the digital bang.
As a footnote, I do remember being the only person in any Starbucks in London on a laptop back in 2006, now 6 years later the place is full of them!
This proves that perhaps I am 4-6 years ahead of consumers when it comes to technology and new services. I’m happy to be a trailblazer for digital disruption.