Will AT&T give Starbucks competition as the new ‘third place’ for people to hang out?

Discussion
Image: about.att.com
Sep 25, 2018
Matthew Stern

Dropping by the smartphone store — at least for non-iPhone users — is usually a trip people only make when their device breaks. But, AT&T is testing a concept meant to turn its brick-and-mortar outlets into a place for entrepreneurs, remote workers and people just to hang out – whether they’re AT&T customers or not.

In Seattle, the telecom company is launching a new concept store called The Lounge by AT&T. The store is a 3,000 square-foot space with high-speed internet that AT&T intends visitors to use as a meet-up spot, a place to work and a place to socialize. The Lounge will feature a coffee shop called Ada’s Discovery Café, an outlet created in partnership with local business owners, powered by coffee robots and managed by award-winning barista Cole McBride. In addition to buying coffee and food, customers will be able to shop for AT&T gadgets via a large touch screen or their personal devices and pick up their purchases from an in-store locker.

AT&T isn’t the only company hoping to create a place for customers to collaborate and work remotely.

Collaborative working environments like WeWork, which offer office amenities for remote workers, have begun to grow in popularity and some mall landlords are even adding them to their tenant mix.

Established retailers are trying their hand at the space, as well. Office Depot, for instance, has taken steps to differentiate itself in the struggling brick-and-mortar office supply landscape by launching its BizBox concept, a store which offers small business consulting services, tech support and a space for customers to network. And Joann Fabrics has been pursuing reinvention with an experiential concept that features a coffee shop along with many services targeted at crafters.   

The Lounge by AT&T will, of course, also be in competition with the most popular “third place” destinations out there – Starbucks and other coffee shops. 

AT&T plans to drastically expand its retail footprint with 1,000 new stores by the end of 2019. It has not announced if other stores will also use The Lounge concept. It has said it intends to open “many mobile and pop-up formats.” 

DISCUSSION QUESTIONS: Do you think The Lounge by AT&T concept can be successful in markets with a strong coffee shop culture? What might AT&T have to do to make itself appealing to entrepreneurs, students and other customers who utilize these types of third places to work and/or socialize?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"The real story here is that AT&T is looking for ways to be an integral part of the consumer's life."
"While my ideal coffee shop/work place might not have an AT&T store attached to it, my ideal AT&T store DOES have a coffee shop inside of it."
"Starbucks has become so overrun with remote workers, students etc, that perhaps there is space for At&T to open their doors to this possibility."

Join the Discussion!

15 Comments on "Will AT&T give Starbucks competition as the new ‘third place’ for people to hang out?"


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Mark Ryski
BrainTrust

Just what the world needs, another coffee shop. While I appreciate the intent and effort AT&T is making, I’m skeptical that this concept will prove to be successful. The reason Starbucks is so successful is that it was the first “third place.” Creating places that people naturally want to go takes more than merely offering coffee — even really good coffee. The place has to have a feel, a vibe that people are attracted to. I have a hard time believing that people will just want to hang out at the AT&T store — by the way, where is it? Not far from Starbucks.

Dave Bruno
BrainTrust

While I applaud AT&T’s efforts, I am skeptical that people will embrace their local wireless store as a third space. In my experience, visiting any of the seemingly always-busy carrier stores is almost as painful as a visit to the DMV. I always have to wait for help, and the caliber of help I get is hit or miss, at best. Overcoming that brand perception to the point where people will look forward to “hanging out” in one of these stores, filled with digital sales pitches and coffee robots seems a bridge too far…

Shep Hyken
BrainTrust

The title of the article implies that AT&T is going to take on Starbucks as the “third place” to meet/hang out. I highly doubt it. What they are doing is standing out in the highly competitive mobile phone world. Any opportunity that AT&T can do to incorporate their brand into their customers’ lives is an advantage.

Neil Saunders
BrainTrust

There are already a lot of coffee shops out there so AT&T needs to differentiate in order to make this success. However, there is also an increasing need for places to work outside of the home; Starbucks is OK for that but it is not ideal. If AT&T can appeal to the mobile working crowd, then this could be a success.

Brandon Rael
BrainTrust

This may just work as an alternate remote workspace, however Starbucks and other coffee shops are already top-of-mind for consumers as a landing spot to connect, work and have a cup of coffee. It’s very doubtful that AT&T will have any impact on the well-established coffee shop market. However we might be surprised as this concept could resonate with freelancers, consultants and students who can’t necessarily afford a desk at WeWork and other shared office spaces.

Starbucks has become so overrun with remote workers, students etc, that perhaps there is space for At&T to open their doors to this possibility. We have seen restaurants in NYC leverage their space for remote workers during the day via a company called Spacious, so today anything is possible with the changing working dynamics.

In addition, the brand will be able to make new connections with their local community, attract people to their stores and potentially sell new products and services to a new market segment.

Mohamed Amer
BrainTrust
Mohamed Amer
Independent Board Member, Investor and Startup Advisor
1 year 1 month ago

The real story here is that AT&T is looking for ways to be an integral part of the consumer’s life. Whether that is a student, entrepreneur, or couple of people looking for a good spot with a free Wi-Fi network. Strategically, the company cannot be simply an anonymous infrastructure of pipes enabling all the potential of a connected society.

The AT&T retail concept is one of several other steps the company is taking to associate the brand with the benefits of being connected, of creating communities with similar interests and simply being part of the local social fabric.

Good coffee and award winning baristas may be part of the draw, but consumers will stay if the location is convenient, the Wi-Fi is strong with easy access and if the environment is warm and conducive to creative conversations and not a replication of a sterile office setting. And oh, by the way, they can even sell some new gadgets and add-on accessories. The potential is high and is definitely worth the effort.

Rich Kizer
BrainTrust

There is probably room for more. More people are working remotely and more are just wanting to hang out. The experience will need to be unique to stand eye-to-eye with Starbucks. Especially since Starbucks CEO Kevin Johnson has issued the mandate for quicker and more unique innovations to come that will meet the specific needs of their stores and customers. Wow, all this and it has been only a few months since Johnson took over the office.

Evan Snively
BrainTrust

While my ideal coffee shop/work place might not have an AT&T store attached to it, my ideal AT&T store DOES have a coffee shop inside of it, so through that lens I think this is a definite win for AT&T. The mobile phone retail experience across all carriers is notoriously homogenous and vanilla so why not take an (espresso) shot at breaking the cycle?

Patricia Vekich Waldron
Staff

Third places continue to evolve — it remains to be seen if AT&T can become a preferred location. Check out my recent blog on this topic.

Adrian Weidmann
BrainTrust

AT&T should have done this about four years ago. They’ll now have to compete with Capital One bank locations! It seems like all these brands are turning into coffee shop destinations — as if that was an innovative idea that will save their physical retail presence. Juan Valdez should come back and thank all these brands!

Ian Percy
BrainTrust

I’m with Mark, he pretty well captures the situation. Another innovative breakthrough for consumers; overpriced coffee and free office space. I’d love to see the real vs. projected revenue stats on the space. It also makes me wonder just what data they are collecting from all those bathing in the same online tub.

Ed Rosenbaum
BrainTrust

AT&T must think they have something here or they would not be telling us about it. I can’t see it for anyone other thsn AT&T customers who might be in the area. A cell phone retail store does not seem like a destination point in my opinion.

Cynthia Holcomb
BrainTrust

Instant vibe, cool decor, open spaces, tech orientated and coffee! As an office-less person, having an alternative to Starbucks is a great concept. As long as it’s not a marketing, selling, hidden agenda. What would knock it out of the park? Private WiFi. Starbucks WiFi always seems a bit dicey and crowded. Enough evidence to prove room for a new player.

Trevor Sumner
Guest

I was skeptical at first but warmed to the idea as I read more about it. AT&T as a carrier brand is middle of the road with an NPS of 15, but that’s certainly higher than Verizon (7) and others. If they can brand this as a business meeting place, that’s clean with great WiFi, there is an opening in the market. But I think it will be hard from a cost structure basis to justify making it the business meeting destination experience just by advertising and buying AT&T products in a locker.

Mike Osorio
BrainTrust

This for me is an overreach by a brand trying to emulate a successful concept and apply it to the boring world of telecom, which only Apple seems to have been able to create at retail. It’s an interesting experiment, but I can’t imagine choosing an AT&T store and an unknown coffee brand over Starbucks or whichever coffee shop I might prefer today.

wpDiscuz
Braintrust
"The real story here is that AT&T is looking for ways to be an integral part of the consumer's life."
"While my ideal coffee shop/work place might not have an AT&T store attached to it, my ideal AT&T store DOES have a coffee shop inside of it."
"Starbucks has become so overrun with remote workers, students etc, that perhaps there is space for At&T to open their doors to this possibility."

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