"I get asked a lot, 'Aren't you concerned about people loitering in your stores, using the Internet, and not buying anything?' " Huston says. "The reality is exactly the opposite. Our most successful stores turn out to be the ones with the most loitering. We think it's great if people want to stay awhile. It creates a sense of community."
Meanwhile, Starbucks is learning to use its own Web site as a handy adjunct to its physical stores, rather than hoping to turn the site into a major profit center. The company's online store and its somewhat smaller catalog operation -- together known as Starbucks Direct -- account for 1% to 2% of total company revenues, according to Jim Nystrom, vice president of that operation. (Total revenues exceed $2.2 billion, so the combined Web-and-catalog business brings in $20 million or more each year.)
Starbucks Direct provides a welcome revenue stream, says Nystrom. In particular, it gives Starbucks a good way to sell such merchandise as espresso machines, which go for as much as $399 apiece, without having to stock every possible model and color in each store. But online sales are unlikely to be a huge growth area for Starbucks. "Bear in mind that our biggest-selling item in the stores is freshly brewed espresso," Huston remarks. "And you can't buy that over the Web."
That same focus on Starbucks's core business dominates Huston's thinking about what the company's wireless-connectivity initiative might achieve. Yes, Huston says, he will be watching to see how much revenue that initiative brings in. "But I'll be happiest," he says, "if people start telling us, 'I used to come in just for my morning coffee. Now that you've got Internet connectivity, I'm coming back for coffee and a snack in the afternoon as well.' "
George Anders (ganders@fastcompany.com) is a Fast Company senior editor. Visit Starbucks on the Web (www.starbucks.com).
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