Article

Starbucks plugs up electricity for some

Some stores are covering electrical outlets, to discourage lengthy laptop visits.

October 2, 2011

The following is an excerpt from a recent conversation on RetailWire, with comments from its panel of contributors.

Starbucks admitted in August that it had started covering some electrical outlets at certain busy Starbucks coffee shops in New York City to discourage laptop users from overextending their stay while freeing up seats for others.

"Customers are asking (for it). ... They just purchased a latte and a pastry and there is nowhere to sit down in some of these really high-volume stores," Starbucks spokesman Alan Hilowitz told Reuters.

He said the decision is made on a case-by-case basis by individual stores and he believes it is limited to some locations in New York City. Free WiFi and offering free refills for card holders also extend stays.

"If this is what the store needs to do to support the business, then they're allowed to make the decision to do that," Hilowitz said. "It really is all about the balance."

The socket blocks were first brought to light on the blog Starbucks Gossip, where some readers noted that outlets were being replaced with blank face plates. Not surprisingly, the Internet was flooded with opinions on the merits of the move.

The actor who started the Starbucks Gossip entry said he relies on Starbucks to "refill both my belly and my smartphone's battery" between auditions. He finds the new electricity rationing "disturbing" because it "would seem to run contrary to the company's 'Third Place' philosophy." Starbucks has attributed much of its success to being looked upon by fans as the "Third Place" to hang-out after their home and work.

At ZDNet, blogger Zak Whittaker wrote that Starbucks has become "a wonderful alternative for students to the college library." And while he asserts that people shouldn't stay for hours without making a purchase, "blocking off the power points seems to be a step in the wrong direction."

However, responding to the Starbucks Gossip entry under the headline, "Can't please everyone," a purported eight-year Starbucks veteran said, "In certain extreme circumstances, where management have exhausted other avenues of resolution, stores have covered their outlets because people do abuse the 'welcoming' nature of Starbucks.'"

Writing for The Stir, blogger Kim Conte thought the move was "completely fair," arguing, "Laptop loafers rudely hog all of Starbucks' space, leaving little room for other customers to enjoy their coffee."

Reports on Starbuck's move also noted that other cafes have been looking into limiting the times laptops can be used to free up seats, as well. Many Panera Bread locations, for instance, restrict the duration of free WiFi to 30- or 60-minutes during peak hours.

RetailWire BrainTrust comments:

My prediction is that this is a short-term mistake and the outlets will be uncovered shortly. Starbucks is too smart and customer savvy to do something as ridiculous as this. The better solution, which my local Starbucks executed, was to redesign the perimeter of the store for more laptop access, which left tables in the middle open to those who were electronically connected. - Gene Detroyer, Entrepreneur, Advisor, Consultant, Professor, Independent

As with most challenges involving human nature, it is once again the few that abuse a well-meaning gesture and spoil it for the rest. Starbucks is in the business of selling coffee and not renting remote office space. Running a quick calculation, the electricity cost of a single laptop running throughout a business day at one Starbucks location is just under $10/month. With 17,000 locations worldwide, that translates to more than $170,000 every month just to cover the electricity costs. Perhaps each latte bought could buy you 60 minutes of 'AC time' while WiFi remains free? - Adrian Weidmann, Principal, StoreStream Metrics LLC

I don't know that this will work in every location, as each one has its architectural quirks, but in Starbucks' shoes, I would divide up the space -- over here is the laptop space, with outlets and all the amenities of "third space." Over here is the high-turn tables -- no laptops allowed. If the laptop space is full, that's too bad. Come again at a less busy time.

I've always thought that, particularly at some of these high volume locations, there is an opportunity in store design to provide premium seating to premium customers -- whether the laptop crowd or the coffee crowd. There's also something to be said for providing WiFi to Starbucks cardholders only -- and shutting it off after 30 minutes during high volume times. The WiFi and the power are provided as a courtesy, as a way to sell more coffee. If it's not working, Starbucks should definitely adjust. - Nikki Baird, Managing Partner, RSR Research