Retail

The Coffee Shop Office: A Money Drain Or Money Magnet?

The coffee’s on, and so are the laptops. It’s an average day at the coffee shop, whether it’s a massive international chain like Starbucks or a local mom-and-pop café.

It’s a smart business move for the freelancers, startups and independent contractors using the shop as their office. Instead of paying rent on office space, they’re simply paying rent on a table in the form of a drink or two a day, and maybe a snack if they’re peckish.

Whether these people are meeting with colleagues and clients or simply writing and answering emails at their computer, the coffee shop can be a positive environment for creativity and productivity, with just enough noise (and, of course, caffeine) to keep the wheels turning, but not enough familiar faces to become a distraction.

But what about the coffee shop itself? Having folks sit around for hours, ordering just one or two drinks and a snack can’t be good for profits, can it? Think of all the customers who may have just wanted to sit down for a quick cuppa — if only they could have found a place to actually sit. Surely there are potential guests who walk in, see the tables full and walk back out. Restaurants rely on turning tables quickly to improve profits, a strategy that is mutually exclusive with the coffee shop office trend.

While this may be the case for some, there are coffee shops that have experienced quite the opposite. The key was recognizing the trend early and finding ways to capitalize on it, incorporating a workspace culture while also encouraging the community to continue using the café as a social gathering space.

Marco Suarez, co-owner of Methodical Coffee in Greenville, South Carolina, said that flipping tables may be the right strategy for restaurants, but coffee shops actually benefit from to-go orders, reducing the value of seats in the store. Therefore, having customers stay and work for hours on end is not inherently a problem — the problem is when those are the only customers in the store.

Suarez said it’s all about balance and branding. If a shop is seeing too many customers treating it as an office, to the detriment of those who wish to gather there socially, he said it’s time to reconsider elements such as layout, music and staff to reestablish the cultural norms within the store.

At Methodical Coffee, Suarez said there are no private areas or booths, and not every table has a power outlet — so if people want to work there, they must engage with others. He said that has been an important strategy in cultivating community rather than isolation in his shop.

Pat Mills, the manager of Making Nice Coffee in an up-and-coming neighborhood of a West Coast city, said the workspace trend also hit his shop over the past decade — but unlike Suarez and Methodical Coffee, Mills and his company made the decision to embrace the working culture.

Making Nice Coffee converted its upstairs seating area into a designated coworking space, where freelancers and startups could feel comfortable setting up shop for hours, without fear of getting kicked out. Meanwhile, the downstairs space remained a regular coffee shop storefront for customers who wanted a quick cup to go or a table where they could sit and chat with a friend for half an hour.

Making Nice Coffee also introduced tabs. Mills explained that, just as one can open a tab at the bar, customers who plan to stay at the coffee shop all day long can open a tab for easy, convenient ordering throughout their stay.

Mills said the convenience of tabs may have encouraged some additional spending by guests, but the real value of the capability was encouraging customers to come back again and again to make daily use of the workspace — and drink plenty of coffee while they’re at it.

Matt Doud, co-owner of Order & Chaos Coffee Shop in Baltimore, took a similar approach by opening his coffee shop in a space adjacent to his other business, Baltimore ad agency Planit. Guests working in the café can see into the Planit office through a glass wall called “the observatory.”

“Both Planit and Order & Chaos feed off each other’s energy,” said Doud. “One of the reasons that Order & Chaos is such a desirable place for freelancers and independent contractors to work is the close proximity to the hub of activity of the agency.”

Doud said the business is deliberate about creating a positive experience both for customers who plan to stay a while, and for those who are on the go.

The shop features comfortable seating, large tables, free Wi-Fi and charging stations. There is a dedicated back room for group brainstorming sessions, complete with whiteboards and tackboards. Those who are in a hurry can just grab a coffee and a to-go sandwich, salad, breakfast bar or snack.

Finally, Doud said that Order & Chaos has a loyalty rewards program for frequent buyers. He noted that customers who stay and work tend to buy multiple “courses” and higher-priced items, such as food.

“We believe that to be successful, we need to look beyond the immediate return,” Doud said. “The true ROI comes from loyal customers who see our authentic sense of innovation, community and creativity as a destination worth supporting.”

——————————–

Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The July 2019 AML/KYC Tracker provides an in-depth examination of current efforts to stop money laundering, fight fraud and improve customer identity authentication in the financial services space.

TRENDING RIGHT NOW

To Top