This retailer heeded customer requests and upstaged the competition by implementing free Wi-Fi in 200 stores.
Coffee shops are one of the fastest growing businesses in the United States. According to the National Coffee Association, coffee shops generated $12 billion in 2006. In order to stay competitive, coffee shops must offer their customers valuable services that the competitor located directly across the street might not. Paul Balzer, VP of supply chain at The Coffee Bean & Tea Leaf, knew that in order to remain competitive, it would have to offer a service some other coffee chains do not — free Wi-Fi.
On The Web: See Matt Pillar's From The Editor column on Wi-Fi at ismretail.com/jp/7490.
The Coffee Bean & Tea Leaf is a retail coffee chain with 685 locations and 4,000 employees. "Many of our customers requested free Wi-Fi," explains Balzer. "We knew that providing free Wi-Fi in some stores would provide value to them." Some of the retailer's competitors offer a paid Wi-Fi program. Customers purchase hourly, daily, or monthly passes to gain Internet access in these stores. "Paid Wi-Fi is a significant cost to the customer," says Balzer. "We wanted to reward our frequent customers and actively influence new traffic with free Internet service."
Though Wi-Fi provides a valuable service to the customer, the retailer skeptically validated the implementation. The retailer would be incurring yet another monthly cost, and it was difficult to determine if it would generate an ROI. "Based on an anecdotal forecast, customer feedback, and customer research, we decided that the money paid by us would be well worth it to reward our current customers and to attract new ones," states Balzer.
Existing Digital Signage Aids Wi-Fi Decision
Balzer began to research Wi-Fi vendors in the summer of 2007. Ripple, a digital signage company that provides screens to display news, weather, and sports headlines in readable text at The Coffee Bean & Tea Leaf, recommended Industry Retail Group (IRG) to Balzer. IRG is a provider of broadband-enabled network services to retail and quick service markets. Balzer's goal was to display the Wi-Fi access code on the Ripple screens for customers to use. The retailer spent approximately 60 days in contract negotiations with IRG, and the implementation lasted 90 days. The Coffee Bean & Tea Leaf purchased a broadband network, one wireless router for each store, and Scansafe to ensure content filtering. "Basically we bought a Wi-Fi group account that The Coffee Bean pays," explains Balzer. "The customers receive an access number and have unlimited access to free Wi-Fi. We pay for the hardware, installation, and a monthly recurring fee for the service and added services [e.g. content filtering]."
Balzer and IRG agreed on a two- to three-month rollout schedule. IRG coordinated the schedule, and an IRG technician went to each of the locations rolling out Wi-Fi to conduct the installation. "Store managers had to know when the technician was arriving for a number of reasons," says Balzer. A manager had to be on-site in case the technician needed access to back rooms or had questions. The IRG technician installed the wireless router, started service, and tested it. The installation took 2 hours per store. The broadband solution did not tie in with any of the store's other large-scale solutions (e.g. POS system), and minimal training was involved. "The IRG technician showed the general manager how the Wi-Fi works on a laptop in the store," says Balzer. "The general manager simply had to put the access number on the Ripple screens for customer use."
According to informal research the company has conducted, The Coffee Bean & Tea Leaf's patrons are satisfied with the Wi-Fi implementation. Balzer also believes the installation is driving traffic, and it will continue to give the retailer an advantage over its competitors that lack this service.
For More Information On IRG Go To www.industryretail.com