Back to Basics at the Bux

For my last blog entry of this semester, it is only appropriate for me to write about the company that I love so much and worked for over a 5 year span. Starbucks, in its efforts to get back to re-simplify its business model and get back to "the third place" under the direction of founder and the self re-appointed CEO Howard Schultz, has just announced a huge rollout of a new WiFi system in its partnership with AT&T.

Certian AT&T high speed Internet and Wi-Fi customers will now be able to use complimentary Wi-Fi access at over 7,000 Starbucks locations nationwide. For millions of AT&T customers, this means an exponential increase in their mobile connectivity.

This excerpt form the SBUX website explains the new pricing strategy:

"The many conveniences of Wi-Fi: There are a number of complimentary and paid Wi-Fi options, whether you need to check your email, download files for your next meeting, or just surf the Web in coffeehouse comfort.

Complimentary Wi-Fi for Starbucks customers When you register your Starbucks Card and use it at least once a month, you'll receive two consecutive hours a day of complimentary Wi-Fi, courtesy of AT&T. Complimentary Wi-Fi for AT&T DSL customers AT&Ts more than 12 million DSL customers already qualify for free Wi-Fi at their neighborhood Starbucks. Competitive pricing for paid Wi-Fi All other customers can receive two consecutive hours of Wi-Fi access for $3.99."

With this new strategy, Starbucks effectively ends its relationship with T-Mobile who had previosuly been the Wi-Fi provider for Starbucks through their "HotSpot" program, which was much costlier (10 dollars for a day pass).

However, in another attempt to win back the loyalty of their customers, Starbucks will not charge T-Mobile HotSpot subscribers any additional fees to connect to the AT&T network.

As a former Barista and general admirer of Starbucks, this is a great business move. Not only does this provide customers with a much more affordable/free solution to their Wi-Fi needs, but it also takes a huge step to regaining its third-place competitive advantage.

Customers will now be able to use Starbucks as an extension of their living room/office and encourages them not only to stop by and pick up their drink, but to stay and enjoy some leisure time or get some work done.

Not to mention, it will eliminate the shaky T-Mobile network that constantly went down and caused us Baristas countless headaches.

Schultz has truly gotten Starbucks back on track in the few months since he has regained the company's reigns, and I truly think that we will see a revitalized company and increased stock prices in the very near future.

For more about Starbucks, this article talks about Starbucks pulling back on its side venture of entertainment to refocus on their core competencies...another example of Schultz taking the Bux back basics.

This Ad's for you...

The findings of a recent study were just released regarding bar-based digital advertising. The study found that the EXTREMELY valuable, yet hard to reach demographic of 21-34 year olds was extremely responsive to ads that were shown in bars using digital screens and billboards.

“An overwhelming majority - or 78 percent - of bar visitors surveyed could recall at least one of four advertisers that ran ads on bar-based digital screens and billboards according to the Zoom Media & Marketing survey administered by the media research firm Arbitron. Additionally, the survey revealed that brand aided recall ranged from 37 to 53 percent, confirming that people not only saw the ads on the digital screens, but remembered the advertisers.”

This is great news for advertisers, who have had a tough time reaching this highly influential demographic due to their tendency to opt out of ads through means such as Tivo.

But these findings are extremely significant. Out of the people surveyed, they averaged 10 visits a month to bars with an average staying time of 2.5 hours. That is 25 hours of time that advertisers could reach these people each month.

And not only do advertisers get long exposure to these people, but the power that they represent in the marketplace is significant.

“The survey revealed that the audience polled was overwhelmingly comprised of consumers who are early adopters of new products and services, as well as influencers among their peers and family. Additionally, over 79 percent of those interviewed said their friends and family seek them out for advice on new products and services, 87 percent indicated that they actively recommend new products to others, and 93 percent said that their advice influences the consumer habits of others.

'What this means is that our bar media reaches active, social adults who have the power to create strong word-of-mouth campaigns and profoundly affect consumer trends,' said Zoom Media & Marketing President, Dennis Roche.”

As a proud new member of this demographic (I just turned 21 a month ago), I find this study to be pretty spot on. I have been frequenting a number of new bars in the Downtown Los Angeles area since then (two of the best being 7 Grand and J Lounge), and the advertising in these bars seems to be pretty effective. And while I may not be actively watching the screens in the bars or reading the ads, there seems to be an almost osmosis-like effect. I think that this is going to be a huge breakthrough for advertisers, as the bar/club scene will be the new frontier in advertising…Cheers!

iOrder????

It seems as though the "i" in front of nearly all the new Apple products over the past few years has stood for innovation. With all the advances in mobile music technology with the iPod and mobile communication with iPhones, it would only make sense that they would look to expand into another industry. But this time, it is not an industry that you would generally associate apple with...unless of course your thinking of a different kind of apple...

And yes, based on the topic of my blog, you guessed right! The restaurant industry!

Apple has just recently submitted an application to the US patent office (U.S. Patent Application #20070291710 if any of you nerds want to actually look it up,) in which, as this article states:

"Apple describes technology that would allow consumers to use a wireless device, such as a phone or media player, to remotely order merchandise from a participating merchant."

Now this description does not seem very innovative, as countless restaurants already have mobile or text message based ordering systems (Papa John's, Pizza Hut, Quiznos, Dunkin' Donuts, and Subway.) But as always, Steve Jobs and those crafty folks over in Cupertino are always taking one step further.

Their proposed technology would place wireless communication devices in the participating establishments, and when the services subscribers get into the given range, their restaurant choices appear.

And after the mobile order is placed, the user receives notification as to when their order will be ready. No more waiting in line while on the go, and patrons will now have much healthier options other than just fast food when they are in a hurry.

A leading company in the mobile ordering industry, "GoMobo, currently provides text and mobile ordering capabilities to around 200 restaurants in New York City and 10 other areas, including Philadelphia, Chicago, San Diego, San Francisco, and Seattle. Customers love the convenience of being able to avoid the lines...some locations report sales volumes of $3,000 or more a month through the service, and mobile and text orders on average are 24 percent larger than those placed at a traditional point-of-sale system."

But the benefits do not end only extend to the traditional restaurant industry. I actually just returned from a weekend trip to Las Vegas, my first since turning 21, and being able to actually all that the great city has to offer. And after spending hours in the casino at the Treasure Island, I believe that this technology could greatly benefit the gaming industry.

Everyone who has ever been to Vegas knows how hard it is to find that waitress who takes your drink order, only to return half an hour later with a watered down cocktail. Furthermore, when hunger strikes in the casino, you must get up from the table you are playing at, find the nearest food stand, place your order, wait for it to get prepared, and then eat...only to return to the table 4o minutes later. If this technology was implemented in the casinos, gamblers would have the ability to place orders wirelessly and on demand. Drinks would be able to be delivered right to your location based on the wireless signal, and food could be ready without having to wait.

Casinos would profit because players would spend less time away from the tables at the diner, and more time putting their money on the line. Bartender and waitresses could focus on filling drink orders and delivering drinks, and entirely cut out the ordering process. This would significantly increase speed of service, and increase customer satisfaction.

As you can see, the possibilities are endless. And as always, Apple is the one brining it to us first. Until then, you can catch me at the blackjack table.

The Coffee Wars Heat Up

Dunkin' Donuts has officially stepped beyond the realm of being simply the quick donut sh op around the corner that truck drivers stop at to grab a quick snack. The giant chain is slowly encroaching upon the likes of Starbucks in becoming a household name and a local neighborhood cornerstone.

The Coffee Wars are officially in full swing, and with the all the negative press that the Bux has gotten recently regarding its slowing growth, pitiful stock performance, and not to mention the lawsuits, Dunkin Donuts seems to be gaining momentum...and fast.

Historically, one of the defining differences between the two chains has been the personal attention and care that Starbucks has provided their customers (what they call the "third place.") But Dunkin has responded, and with a technological edge.

With a main focus on their blue collar customer base, they started a campaign called "How do you keep america running?" With the use of their very own YouTube channel, Dunkin Donuts has invited their loyal customers to tell their stories in a creative way, and reward the top 50 submissions with free donuts for a year, and a possible place on the Dunkin Donuts website.

This campaign is brilliant! Not only does it give customers the ability to personalize their Dunkin Donuts experience (something that Starbucks had relied on as a competitive advantage,) but it also shows that the big chain is no longer just a quick-stop donut shop. They are now giving their customers a voice. ""Our loyal customers regularly tell us stories, both heart-warming and funny, about how they keep this country running," says Dunkin' Donuts Brand Marketing Officer Frances Allen. "We're pleased to launch our new YouTube channel to give people a chance to tell their unique stories in their own creative way."

With this new customer focus, not to mention their new focus on gourmet coffee (without the pretentiousness of Starbucks,) it seems that Starbucks will be fighting an uphill battle in the Coffee War.

Where the CIA meets KFC

There is now a brand new tool on the market to help restaurant owners and managers control their costs; and it looks like something right out of Mission Impossible. The product is called Hand Punch. Click here to watch a quick video demo of how this product works.

As you can see, this product is pretty intense, and you may be thinking that it is a little over the top just to control an employee punching in and out. But "buddy punching" is an increasing problem in the restaurant industry. This example of payroll fraud is when one employee punches in or out for another employee, in essence stealing time and money from the company.

Systems like this ensure that employees are in fact present during their time on the clock, or as they used to preach when I worked at Starbucks, "time worked = time paid."

Surprisingly enough, 5 minutes of an employees time is equal to 1% of their daily pay, so 5 minutes here and there can quickly add up to lost revenue.

My first thought about this product was that it was a little too Big Brother. If there was a big problem with buddy punching at a restaurant, most likely there would also be a lack of good leadership and management for it to take place.

But as I thought about it any more, it is just like any other part of the industry. Technology continues to evolve, and just as it makes POS easier and more efficient, it should spill over into all other aspects of the business.

So next time you clock in before flipping burgers, you may feel like Will Smith in Men in Black. Don't forget to put your shades on before the red light flashes...

The human touch(screen)

So thanks to my classmate, Goldie Chow, I have come across an extremely interesting article about the use of technology to in essence replace the role of waiters in some up and coming restaurants.

The premise behind this technology is placing a touch screen computer at every table in the restaurant and allowing the customer to place their order using the system. Not only does the computer give diners a digital edition of the menu, but also allows them to see pictures of the dishes they are considering.

And these systems seem to be working. The article cites "Frame, a trendy sushi restaurant in Tel Aviv that has installed the system, [where] sales on tables with the e-menus had increased by about 11 percent. Customers often call ahead to reserve spots equipped with the screens."

This technology is very practical in theory, and in certain instance, in practice as well. However there are a lot of flaws to the system. I recently ate a restaurant near my parent's house called uWink that uses these e-menus. It was a very cool experience, being able to see what the food that I was ordering would look like, as well as being able to play trivia games with my friends while we waited for our food to come.

However, we encountered a number of problems, like the inability to push tables together to accommodate our large party due to the hardwiring of the system, a difficulty splitting the check with the automated payment system, and simply a lack of ease in customizing out food order. Nevertheless, it was a fun night, breaking the norm of dinning at a typical restaurant like CPK.

But integrating technology into our daily lives will always face opposition. "'I don't believe in screens - I believe in humans,' said Yoash Torkman, a businessman lunching at Frame. "I'll wait for 15 minutes for a waitress instead of using this. It's a gimmick and gimmicks have very short lives."

I guess we'll see...Check please!

Get the door in 45 seconds, it's Domino's!

The pizza giant, Domino's Pizza is the latest news maker in the world of Restaurant-tech. At the end of last month, they rolled out PIZZA TRACKER! No, it is not the newest game for Nintendo Wii; it is the latest tool that gives lazy people that absolutely can't wait to devour their molten disk of cheese, sauce, and bread the ability to follow their pizza on every step of its journey.

The service is now available in 3200 stores, and will be implemented in all stores across the country by June 30th. According to restaurantnewsresource.com "Once customers place an order, they can go to www.dominos.com and click on the Pizza Tracker icon. They will see a horizontal bar that lights up red as each step in the process is completed. Customers will see confirmation of their order being received by the store, when it's being prepared, when it's been placed in the oven, when it's been boxed and placed in the Domino's HeatWave(TM) bag, and finally, when it's on its way for delivery." The service gets even creepier as it gives customers the names of the people that take their phone order and deliver it.

I don't know about you, but I think this is a COMPLETELY unnecessary use of technology and a huge waste of money for Domino's. I thought that the entire reason for ordering a pizza to be delivered was that you were too busy to go pick it up or in the middle of something that could not be interrupted. But for someone to use this service, they have to be sitting at home on their computer obsessing as each step of the process takes place.

Call me stupid, cheap, or just motivated, but if I had the time to sit around and watch as Joe puts my order in the oven, and Paul gets into his car to deliver it, I'd rather save the 3 dollar tip and 2 dollar delivery charge and just go pick it up myself!

Hold on, I think my pizza is here...Wait! I know its here.