Starbucks Sees Mobile Customization As New Way To Push In-Store

Consider this scenario: A Starbucks customer is walking the streets of Chicago and his phone beeps an alert. The mobile message tells the customer that the mayor of Chicago has just been indicted and that The Wall Street Journal's site has an exclusive live video interview with the president of the city council, but only for premium subscribers.

However, that video is available for free—right now—at a local Starbucks. By the way, the phone message tells the customer, "you're three blocks from a store—and here's a 25 percent off coupon for a cappuccino while you watch the video."

On Wednesday (Oct. 20), Starbucks launched another campaign to get customers into its stores and, again, it has nothing to do with coffee. Called the Starbucks Digital Network, the program provides free access to a wide range of entertainment and news content that requires a fee elsewhere. The catch: Content can only be seen when customers are within the wireless LAN range of a Starbucks store. It gets better. The plan is to soon integrate the Starbucks Digital Network with loyalty cards, which opens a whole new world of customer data. With Yahoo as its partner, that information could find its way almost anywhere. They'll know not only customers' latte preferences, but their preferences in news and entertainment, too.

As evidenced by the Chicago scenario, this data could eventually provide highly customized hooks to lure customers into the stores.

Adam Brotman, the vice president for Starbucks Digital Ventures, said the chain will soon offer additional (ultra-premium?) content just for Starbucks loyalty customers. "Many will be localized: ultra-local news," he said, because the mobile devices will not only know the location of the customers, but the system will obviously know the precise location of each Starbucks Wi-Fi hotspot.

"In the future, we will able to offer a different experience" for different locations, potentially with either different content sources or different selections within the existing content sources, Brotman said.

How far the chain will go with this program is unclear. "We are capable of doing it, but we have to walk before we run," Brotman said.

He spoke of Yahoo being able to message content—and learn from its use—in a way that Starbucks can't. "They could potentially marry specific stories with specific customers. We could do it, but we want to be careful with that. It tends to be best if [customers] have opted in for that optimization or relevancy."

This data-intensive effort also has the potential to make the original social connections of Starbuck easier. All of the people reading stories about a particular news event might be messaged about connecting with each other at specific times to discuss what is happening and to perhaps take action to deal with that event. Over lots of cups of coffee, of course.