Starbucks, HP, deal won’t work
p2pnet.net News:- The Starbucks, Hewlett-Packard, music industry ‘listen-while-you-sip’ venture is unworkable, says Josh Wattles, a sometimes Internet entrepreneur who’s studied offerings with similar goals.
Wattles, the former senior executive in charge of Viacom’s music subsidiaries, The Famous Music Publishing Companies and a co-founder of Mixonic, a leading online CD-making application, predicts the deal – which Starbucks chairman Howard Schultz promises is a Go – will fall flat for three principal reasons:
“First, there is substantial performance anxiety in presenting a consumer with the function of selecting a custom mix,” says Wattles. “If the consumer is in the company of other people while shopping, this factor increases dramatically and almost geometrically. Even the presentation of pre-selected mixes is a long enough ‘taste test’ to cause substantial resistance on the part of the consumer to follow through to purchase. The investment of time to select often burns the consumer’s allocable time for the entire transaction and all of these options take as long to kick-out a CD as they do to select the contents.
“Second, and related to the first, any operational time study will result in a finding that the equipment and materials and content costs outdistance the available revenues from sales even if the consumer acted with efficiency.
“Third, Starbucks associates can’t answer the simple question of whether the in store wifi connection is open or pay. Only the Baristas are trained in operating the espresso machine. As much as HP is known for great printers (and for lousy PCs), the combination of hardware needed to execute this offering in stores when multiplied by the number of available gremlins and then multiplied by the tech capabilities of associates would suggest that the down-time will be sufficiently dramatic to sink the effort within a few weeks.
“This works online very well because no one is looking over your shoulder, you can listen to samples (and actually hear them) in privacy and most critically you can take your time.”
Wattles also makes another extremely telling point.
“Think about the coffee spills as consumers navigate the HP Tablet PC’s with Latte’s in hand, he says, “or navigate out of the store with the Tablet PCs.”
March 15th, 2004 at 4:38 pm
HP is one of the world’s largest personal computer, server,
and software companies with billions in sales and nearly
150,000 employees and over 50 years in business.
How can you say they make bad computers ?
I have four HP’s running on a router, 0 problems.
How can HP and Starbucks not know their billion dollar businesses ?
Please could you provide more data to support your comments.
thank you.