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« Wee-Fi: Big Brother Fi; Eugene (Ore.); Milpitas (Calif.); XP Net Monitor | Main | AT&T, Starbucks Make Rollout Start Official »

April 24, 2008

Starbucks Leadership Shake Up Signals In-Store Direction

Starbucks entertainment senior VP "left" the company today; its CTO subsumes the entertainment function: If you were wondering if Starbucks might provide even clearer signals about its future plans regarding in-store entertainment and its deal with AT&T to take over providing Wi-Fi services and back-end operations, today's brief announcement speaks volumes. Chris Bruzzo, the company's chief technology office, will add the entertainment group's functions to his current purview. This doesn't surprise me after speaking with Bruzzo two months when the AT&T deal was announced. (A few details from that talk.)

When I talked to Bruzzo, he was clearly focused on how to improve the culture of the stores, with technology being one tool. He talked about connectivity being "a core part of the Starbucks experience" (that's Experience with a [tm]), and that he wanted Starbucks customers to be able to "tell stories" about coffee, music, and other things. That implies a kind of online medium for discussion and interaction that doesn't yet exist, but that is more likely to happen with Bruzzo's expanded role.

starbucks.gifBruzzo had already tipped me to the fact that Starbucks has caching media servers in its stores; that's how the Starbucks iTunes Wi-Fi Music Store combination technology works with iTunes, the iPhone, and the iPod touch in the several markets in which that's offered. (Those plans never advanced much after the initial launch, by the way: Seattle, Chicago, and the San Francisco Bay Area got service, but Chicago and Los Angeles are still listed as "coming soon," and other metropolitan areas are now "by the end of 2008," which would tie in neatly with Starbucks' other plans.)

With caching servers, content is pushed to the edge. Retrieving a 2 GB movie from iTunes thus becomes a matter of a few minutes to a laptop (or even faster if 802.11n networks are being deployed by AT&T), rather than 30 to 120 minutes over a typical home broadband connection. Stop in to Starbucks and fill up--with media. Neat, huh?

Back in February, Bruzzo described how the company has a unique relationship with its customers, who are already bringing their digital lifestyle into the stores, allowing hyper-local conversations to take place. "Starbucks is uniquely positioned to provide that kind of very local opportunity. It's what we do. The beginning of that is what we do today when we curate music, and books." The new AT&T relationship, he said, "gives us a landscape to continue to experiemnt with those kinds of things even at a local level."

As for the kinds of devices used, "We shouldn't be limited in our thoughts about connected devices to just communications devices; they should be PSPs [PlayStation Portables] and cameras." I expect that we will see a lot of change, much of workshopped in Seattle-area stores, in the digital side of Starbucks this year.

I will also repeat my expectation that the launch of a 3G iPhone will involve a Starbucks tie-in, and that the date for the first Starbucks AT&T markets to go live with AT&T in charge will coincide with the release of the 3G iPhone. The timing is too close to be coincidental. (Rumors today are that the 3G iPhone will be announced at the June 9 developers conference that Apple runs. I'll be at that event's keynote.)

Bruzzo has been with the company for not much over a year, coming off a few years as head of communications (talking, not technology) at Amazon. In January 2008, he was boosted to chief technology and chief information officer, as well as being appointed a vice president. That's a pretty fast rise; he must have, you know, a few good ideas. He's behind My Starbucks Idea, the site the company is using to let its customers give it free, valuable advice. One of the fascinating, Cluetrained elements of that site is the transparency: ideas that are submitted can be viewed by other visitors to the site, and voted upon. Suggestion boxes are usually locked tight, whether in the real world or on the Net. Some posts have thousands of votes and hundreds of comments.

Today's announcement also included a note that Starbucks is selling its Hear Music division to its partner in the venture, Concord Music Group. Hear signed Paul McCartney among other musicians; Starbucks will keep working with Concord, so this might not be quite as big a change in direction as a change in its internal focus. This is yet another move of many by company head Howard Schultz, who took charge of the firm again, and started getting rid of top executives, reorganizing divisions, and making announcements about massive changes in the stores, notably replacing its barista-hiding super-automated coffeemakers with shorter, more controllable systems, and tearing out the stinking breakfast sandwich ovens.