An Interesting Model – Starbucks Digital Network (SDN)

Aren't we now living in a UG (user-generated content) era but why Starbucks is doing the otherwise, curating its own exclusive content network?


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An Interesting Model – Starbucks Digital Network (SDN)

In Opinion October 21, 2010

Aren’t we now living in a UG (user-generated content) era but why Starbucks isdoing the otherwise, curating its own exclusive content network?

This is a service summary from Mashable.

“Starbucks customers who use the free Wi-Fi at more than 6,800 U.S. company-operated stores will be greeted with the Starbucks Digital Network (SDN) — an exclusive content network curated by the company and designed to enhance the customer’s in-store experience.”

“The vision,” Starbucks’s Vice President of Digital Ventures Adam Brotman says, “is for Starbucks Digital Network to be a digital version of the community cork board that’s in all of our stores.”


SDN Content, Channels and Partners

Starbucks has manufactured a rich experience around each of its six channels: News, Entertainment, Wellness, Business and Careers, My Neighborhood and the customer-personalized Starbucks channel. The detailed list is here.

Now this is what gets interesting!

Marshable’s comment is that, “one thing that struck us about SDN is that there’s almost too much content to go around.

We broached the subject with Brotman who explained that Starbucks will be tracking user activity via web analytics to get a sense of what users respond to. The network is designed to feel fresh each time you come back and the three promo tiles on the home page rotate to engineer more than 40 unique experiences.

It’s a priority for Starbucks to ensure that customers have easy access to content, and “that all the content partners are feeling like they have an equal shot,” Brotman says.

Motives nicely put but in another word, there is no better way to “keep track” on customers’ (and given the vast customer base Starbucks has, probably a significant chunk of population) preference than going into their devices and take a peep at what they like?


A Premium Mobile Experience

More than 50% of users logging on to the free Wi-Fi are doing so from mobile devices, so Starbucks was motivated by usage behaviors to build a mobile web experience just as good, if not better than, the standard web experience. Content was also designed to be “snackable,” so the mobile user can get value even while waiting in line, says Brotman.

Users accessing the network via mobile devices and tablets will benefit from the HTML5 smartphone-optimized network. SDN for mobile is also touchscreen-friendly, offering a hands-on, swipe-able experience.


The Bottom Line is Choice, but whose choice it is anyway?

One would assume, correctly so, that Starbucks has not gone to trouble of providing free Wi-Fi and a premium digital network without thinking about how it could profit by these pricey additions. If we didn’t know better, we’d presume that Starbucks was charging its partners for placement. Instead, as we’ve disclosed before, there’s no money changing hands — unless SDN users make purchases from partners, in which case there is a revenue share.

Claimed to be a value-added service for brand differentiation, SDN is designed with two key objectives in mind, says Brotman: enhancing the customer’s experience and better engaging customers while they’re in the store.

The engagement piece is centered around what Starbucks can do with location and perhaps reveals a bit more about Yahoo’s motivation to participate. “We’re really excited about the fact that we can leverage the location-based nature of the site to connect our customers with the communities around the stores,” he says.

To be fair, there are just too much information out there and if it’s not because of SDN, one would probably only log into Facebook and Twitter and Mashable when they go online in Starbucks. Paradoxically, I could see that what Starbucks is doing is indeed an encouraging gesture for you to come back out and explore a little but more about the world than your own friend list, with content carefully selected and consumption experience enhanced.

But probably it won’t be your choice by Starbucks’s choice. Given that they have music and books and stuff, Starbucks believes that theirs the choice you should trust. Putting conspiracy aside, it’s understandable that SDN is consistent with the brand image they’ve been building.

Starbucks is not a coffee brand, it’s a lifestyle brand. Just like Google who wants to own your life, maybe Starbucks want to have a share of your lifestyle.