Starbucks says Wi-Fi’s a hit

Starbucks Chairman and CEO Howard Schultz this week mentioned the coffee retailer’s in-store Wi-Fi access, among other factors, in reporting a sharp sales increase for June.

While Schultz said the wireless Internet access, offered in partnership with T-Mobile, contributed to a 27% increase in revenue for June over the same month in 2002, he didn’t give any information about specific Wi-Fi sales. Lovina McMurchy, director of new ventures at Starbucks Interactive, said it is company policy not to release Wi-Fi sales results.

The Starbucks stores with Wi-Fi access account for the lion’s share of T-Mobile’s 2300 Wi-Fi hot spots, and McMurchy said several new hot spots opened up this week at Starbucks stores in Arizona, Nevada and Minnesota.

While Wi-Fi sales results haven’t been available, McMurchy said the average Starbucks Wi-Fi user spends about 45 minutes per session using the hot spot access, “much longer than our average coffee customer spends in the store.”

Starbucks also is starting to get plenty of company in the public Wi-Fi hot spot market. In addition to T-Mobile’s Wi-Fi retail partners--Kinkos copy shops and Borders book stores--partnerships between other retailers and network operators are on the upswing. Wi-Fi operators Wayport and Cometa Networks are scheduled to begin trials of service at a handful of McDonalds restaurants next week.

McMurchy said she doesn’t see McDonald's as competition, with Starbucks targeting professionals and McDonald’s aiming at families and a younger demographic. “There are addressable segments in the market, [and] there is probably not a lot of overlap.”

She added that Starbucks also is working on developing new applications and promotions to package with its Wi-Fi access. “We do believe that continuing to innovate our basic concept is crucial to our growth,” she said.