Retailers strengthen customer bonds with free in-store Wi-Fi access.
Affordable sustenance aside, foodservice giants McDonald’s, Starbucks and Panera Bread all give laptop-toting patrons good reason to linger: a no-cost Internet connection, in some cases with custommade content.
In fact, it’s almost impossible to enter any coffee shop, quick-serve restaurant or greasy spoon and not see at least a few customers updating their Facebook status, checking e-mail or working on presentations. Free Internet access via radio technologies called 802.11—or “Wi-Fi,” the Wi-Fi Alliance’s trademarked term for wireless fidelity—has become a worldwide convenience, with more than 25,000 certified “Wi-Fi Zone” hotspots spanning the globe.
As is often the case, the channel has learned a few lessons from the competition. It might seem contradictory considering a c-store’s traditional reputation as an in-and-out oasis, but a growing number of retailers are adding Wi-Fi as just one more reason to not only stop in but also stay a while.
Free Wi-Fi makes sense for c-stores with room to spare, but the service also raises a few red flags: If Wi-Fi users choose to “stay a while,” does it create an inconvenience to other customers by clogging up precious seating areas? A recent Los Angeles Times report suggests some West Coast coffeehouses have chosen to walk away from Wi-Fi for this very reason.
More to the point, do the benefits of free Wi-Fi—competitive legs up, the potential to drive sales and a tempting lure for so-called millennials— outweigh the risks, which include not only loiterers but also hackers bent on corrupting a store owner’s internal communications network?
Wi-Fi Acts as an Informal Loyalty Program
Some Open Pantry locations look more like upscale coffeehouses than convenience stores, a similarity only heightened by the small chain’s “easy decision” to add free Wi-Fi. Interestingly, Open Pantry chose to let laptop owners boot up at each of its 27 stores, not just the ones with comfy chairs and Starbucks charm.
As further evidence of Open Pantry’s commitment to keeping customers connected, the chain’s 18 stores with space to spare—the average Open Pantry measures roughly 3,500 square feet—provide two Web-enabled terminals for those without laptops.
“[The terminals] are available 24- seven, and they’re used quite often, especially during lunchtime and after the 5 p.m. drive time,” says Jim Fiene, Open Pantry’s COO. “We try to restrict terminal usage to 15 minutes, but we enforce it only if other customers are waiting, and many times there are. We think that’s a good thing.”
But customers don’t even have to be inside the four walls to log on; Open Pantry amplified its Wi-Fi signal at each store so customers can log on while sitting in their cars. This feature has sparked a demand for additional parking spaces, but Fiene believes the investment is money well spent because Wi-Fi has become “a brand staple.”
Open Pantry provides the service at no cost despite significant temptation to turn it into a revenue stream, Fiene says: “A lot of [vendors] come in and say, ‘Why don’t you charge for it? You can make money.’ Our profit center is solid, and it’s Open Pantry itself, and these are the marketing peripherals we need to maintain it. It’s simple to offer, and we think it’s incredibly valuable.” The initial investment was no obstacle, according to Fiene.
For the terminals, Open Pantry uses nothing more “glamorous” than a $20 keypad and $15 mouse, and the computers cost no more than $800. “The question for us is: Do we put more [terminals] in?” he says. “Should we have six to eight instead of two? The answer is probably yes.” For those using laptops, the company makes sure every table in its seating areas has an electrical outlet—approximately 3.5 feet off the floor, at table height, for ease of use—at a cost of $125 per outlet.
Fiene suggests offering free Wi-Fi, which the company has been doing for more than four years, is not for a “weak- IT’d organization.” Securing the computers against hackers is a monthly challenge, he says, especially at stores near college campuses, whose students are “much smarter than we are with computers” and seem to always find a way to sidestep firewalls and filters. The in-store terminals have a failsafe, however: Rebooting the computer scrubs out any viruses and “other junk” loaded into the system or otherwise renders any unsanctioned changes obsolete.
“Everything is a surprise when it comes to computers,” he says. “Every time you have a firewall or a system you think is infallible, somebody finds a way to make a computer laugh at you. … It’s nothing terrible, just goofy things people do just because they have the ability.” Wi-Fi’s effect on store sales has been difficult to measure, but Fiene says
Wi- Fi has acted as a sort of informal loyalty program: “It gives people another reason to choose Open Pantry. What you see is the same people coming back every day to check e-mail. It becomes a matter of, ‘Let’s find an Open Pantry and sit down and do e-mails during lunchtime.’ It becomes a habit.”
The New Generation Wants Connectivity
“I like tech,” says Scott Hartman, Rutter’s president and CEO. In truth, he’s something of a tech junkie, long associated with the industry’s retailtechnology conference, NACStech. So it’s no surprise he’d want to encourage his customers’ fondness for automated gadgetry by offering free in-store Wi-Fi. “We think there are some competitive advantages,” he says. “It fits our overall focus on the younger generation who may want connectivity all the time, plus it’s for the business traveler who’s out and about. It’s not unusual to go into our seating areas and see a businessman having lunch or a cup of coffee while he’s checking his e-mail, but generally it’s an in-andout transaction.”
Rutter’s started offering free Wi-Fi in 2008, and today as many as 35 of the company’s 55 stores in central Pennsylvania offer the service—essentially, every store with sufficient space and seating. Every new store going forward will have it as well, according to Hartman. The Wi-Fi signal is strong enough for customers to link into Rutter’s network even without being inside the store, so some customers get online while in the parking lot.
“Like everything else we do, it’s about making a pit stop,” he says. “We don’t find the seating areas congested with people who are just not buying anything. It seems to be an accommodating give-and-take kind of thing, where they buy something and we give them free access.”
As with Open Pantry, cost was not an issue for Rutter’s. Hartman says adding the service was much less expensive than he anticipated, although he couldn’t share specific numbers because Wi-Fi “rides our existing broadband connection.” Similarly, he also could not articulate precise numbers regarding Wi-Fi’s effect on store sales.
“The only thing we look at is the number of hits in our stores, and we can clearly see this is an offer people take us up on,” he says. “You can see the frequency factor. Our sales are still running quite positive, but [Wi-Fi] is something you can’t put a correlation to.”
Rutter’s promotes the service on its website as well as through “Wi-Fi Zone” signs on its storefronts. Although more than a few area coffeehouses and quick-serve restaurants also offer free Wi-Fi, he’s somewhat surprised more convenience retailers haven’t followed suit. He thought by now it would have become a standard industry offer but has accepted his company’s status as a so-called “early adopter.” That said, he cautions retailers interested in adding Wi-Fi to exercise their due diligence: “Don’t proceed without understanding how to protect the integrity of your internal network. … You’ve got to make sure the firewall is clean between your internal and external groups of users.”
There’s also the related issue of adhering to PCI (payment card industry) compliance mandates, which require marketers to follow specific technology and system guidelines designed to make credit- and debitcard transactions more secure. If a hacker successfully invades a retailer’s internal network and somehow gains access to customers’ credit-card numbers, for example, the results could be painful—and expensive.
“It’s not a simple matter of throwing a router off your store network,” Hartman says. “That’s what you call a bad idea.”
Customers Base Meal Decisions on Wi-Fi Availability
In the more than three years of offering free Wi-Fi, Nice N Easy has benefited from steady customer usage with no notable snags, barring a minor exception. At a store in Tully, N.Y.— one of the chain’s busiest for foodservice and motor fuels—a problem arose as a result of too much usage. “We found early on at that store that we had so many connection points used by our wireless network that it was actually kicking off our credit-card acceptors at the pump,” says Fran Duskiewicz, Nice N Easy’s senior executive vice president. “Our credit-card acceptors are online too, so we were losing connectivity. We had reached a limit so we had to go to our Internet provider … and get more connection points in the stores.”
Since then, it’s been a smooth sail for Nice N Easy’s Wi-Fi adoption, which grew out of the company’s pronounced foodservice culture, complete with seating areas. Nice N Easy has 80 stores throughout upstate New York, split almost evenly between corporate and franchised locations, and the company quickly learned that sit-down foodservice and Wi-Fi were perfect complements in an era of constant connectivity.
“We found that people were deciding where to eat lunch or stop for a coffee break or whatever based on where they could fire up their laptops or even their smart phones and do some work,” says Duskiewicz. “Wi-Fi availability is something that helps them make up their minds.”
Nice N Easy has had no trouble with Wi-Fi abusers, he adds: “It’s not ever come up where we’ve had to ask somebody to move along. We tend to think we’re dealing with a customer base that tends not to loiter; they’re not there sitting in a chat room.”
Given the company’s embrace of instore wireless technology for operations purposes, Duskiewicz remembers the decision to offer customers Wi-Fi coming down to one simple question: As long as the internal network is secure, what harm could there be in giving customers something for free that might also create a competitive advantage?
“The truth is, there’s no investment; we’ve made our stores wireless anyway,” he says. “You could put a password on it and derive no other benefit from it than your own internal use. But by not putting a password on it, you turn it into something else. Anything you can do to draw one extra customer a day is purely benefit. It’s another reason for someone to stop in.”
Nice N Easy has incorporated Wi- Fi at its corporate office as well. Vendor reps in town often sit in the lobby and work on their laptops before meetings with Nice N Easy category managers and also use the service to make Internet- enhanced presentations.
“Obviously you have to be cognizant of PCI compliance and make sure the networks are secure,” Duskiewicz says. “None of our key data is being run through that particular network [for Wi-Fi], meaning it’s not the network we have any important data going over.”
Although Nice N Easy has been offering Wi-Fi for several years, Duskiewicz realizes it isn’t for everyone. He says it’s a matter of identity: “It depends on what you [as a retailer] want to be. Do you offer seating or keep people moving in and out the door?
“At Nice N Easy, we do have sit-down facilities in all our stores with foodservice, and everybody in the world wants to be productive 100% of the day, it seems. So when people come in our stores, they can actually sit down and get something done.”
Is Wi-Fi a Good Fit?
Wi-Fi doesn’t necessarily make sense for all c-stores. Retailers who provide the service offer some advice for anyone mulling in-store Internet access for customer use:
- Determine if it’s a realistic match given the identity of your stores. Do your stores offer ample seating for laptop users, or do your locations have more of an in-and-out layout?
- Stay safe. Protect your internal communications network from potential hackers while adhering to PCI-compliance guidelines for securing customers’ transaction data.
- Make it as convenient as possible. Ensure that laptop users in all seating areas have easy access to electrical outlets, best suited at or near table height.
- Amplify. Boosting the strength of the Wi-Fi signal enables customers to access the network from their cars. Users tend not to linger, thereby freeing up parking spaces.