DVDs and Fries: New Ways To Consume Technology

By Ariana Eunjung Cha
Washington Post Staff Writer
Sunday, August 28, 2005

SANTA MONICA, Calif . --Technically, it's still a coffeehouse. But on certain evenings, when the place fills up with young adults gathered around computer screens, this Starbucks outlet becomes more like a futuristic bar from a science fiction movie.

Gaggles of girls sip lattes as they pass around headphones at listening stations stocked with 150,000 digital songs. Sweethearts sit knee-to-knee on stools picking out their favorite tunes to burn on a CD. "Waiters" and "waitresses" on the other side of the counter stand ready to mix another caffeinated drink as well as to offer advice on the newest new band.

"The overall strategy is to build Starbucks into a destination," said Kenneth T. Lombard, president of Starbucks Entertainment, a division of Seattle-based Starbucks Corp.

Starbucks is among a growing number of non-technology companies that are out to transform the way Americans consume technology.

Customers of McDonald's restaurants can now pick up a DVD rental along with their Big Macs and fries at a growing number of locations. The fast food chain also is testing a kiosk at its flagship store in Oak Brook, Ill., that allows customers to download ring tones for their cell phones and print high-quality digital photos from their cameras. Grocery chains such as Safeway, Albertson's and Stop & Shop are rolling out DVD rental machines. Gap, Eddie Bauer, Lane Bryant and Restoration Hardware are selling CD mixes with company-branded packages. And 7-Eleven stores are stocking a line of pre-paid cell phones.

Tech gadgets are even popular giveaways. This summer, Hecht's department stores offered shoppers who bought $50 worth of Dockers clothing a free Blackberry wireless handheld, and financial services companies like Citibank have promised iPods to customers who sign up for an account with a certain balance.

Buying technology once meant having to trek to a specialty electronics store. But as the prices of laser disks and computer chips have plummeted and as gadgets have simplified, other types of outlets have begun to sell technology and entertainment offerings, turning sophisticated items into commodities like milk and eggs.

Josh Bernoff, a media technology analyst with Forrester Research Inc., said the idea of stopping by a retail food chain or other type of store to pick up technology appeals to a modern culture that's obsessed with speed and efficiency.

"It's about instant gratification," Bernoff said.

In some cases, retailers set out to target the last untapped high-tech market: technology laggards, people who might be somewhat intrigued by the new-fangled gadgets, but haven't set aside the time and money to seek them out. An estimated 32 percent of Americans do not own cell phones, according to a 2004 survey by the Pew Research Center, and 38 percent don't own computers, according to a 2003 U.S. Census Bureau estimate.

The surprise, retailers say, is that many of the customers who take advantage of the stores' new high-tech offerings don't fit the mold. These buyers are sophisticated about technology and looking for more seamless ways to integrate it into their everyday lives.

Margaret Chabris, a spokeswoman for Dallas-based 7-Eleven Inc., for example, said the chain thought the main buyers of its Speak Out cell phones would be people having trouble getting an account with a major carrier because of credit problems. The cheapest is $29.99 and there is a flat rate of 20 cents a minute at any time. Another allure is anonymity: there's no need to sign up or get credit approval. But the chain has noticed that many wealthier, tech-savvy clientele have been buying the phones to give to their children or elderly parents or as a backup for emergencies.

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