Wi-Fi - Adding value to a latte or cappuccino
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Coffee shops, as those who frequent them, are more than coffee shops. They are an intrinsic part of a neighbourhood. A place to meet friends, pass some time, and increasingly conduct business. Many self-employed people will base themselves in their local coffee shop at regular intervals - some even spend all day there. So part of the value that a coffee shop can add to its customers is the provision of extra services which make the experience more enjoyable or useful. In my book, as in the case of hotel rooms, Wi-Fi access is an example.
The problem with most hotels is that they see internet access as just another premium add-on which they can use to rip off their customers. £12.50 for 24hrs online access? Scandalous.
So I think hotels could learn from a decision by Caffe Nero, one the leading coffee shop chains, to offer free Wi-Fi from now on. It is doing this by contracting with The Cloud, a Wi-Fi provider that was recently acquired by BSkyB. The move brings Caffe Nero into line with several of its competitors, including Pret.
Does the provision of free Wi-Fi make commercial sense? Ask students to consider both sides of the argument.
- What additional revenues and profits might arise from attracting and retaining customers who want to stay for more than just a quick coffee or meal?
- Might it cause capacity utilisation problems if Caffe Nero outlets suddenly become overwhelmed with workers looking for a comfortable and cheaper office replacement?
- What are the real costs of providing such a service?
- How might Caffe Nero use the Wi-Fi service as a way of gathering information about their customers (e.g. through a simple registration or login)
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