WiFi Hotspots Draw the Right Demographic to Independent Bookstores

February 21, 2007

All retailers, regardless of their product mix, share many of the same challenges -- not the least of which is driving traffic to their stores. As more consumers begin to use the Web via wireless connections, booksellers are hoping to attract more customers by offering wireless Internet access -- aka "WiFi hotspots" -- in their stores. And based on reports from a number of booksellers, the strategy is working.

"It brings people in," said Kelley Drahushuk of The Spotty Dog Books & Ale of Hudson, New York. "And they will always buy something. People will become comfortable in your store and will shop. It makes regulars out of people."

Wireless hotspots refer simply to any area that offers wireless Internet access to computer users. Some establishments charge users for the service, though it is far more common to offer WiFi hotspots (also known as WLAN hotspots) free to users as a value-add. As Philip Rafshoon of Outwrite Bookstore and Coffeehouse in Atlanta noted, "It's hard to make people pay for wireless."

Since 2004, WiFi capabilities have become standard in most laptops sold, according to a report from Business Communications Review. As the number of users with wireless technology grows, so will the demand for WiFi hotspots.

Research released in November by ABI Research predicted that the number of commercial WiFi hotspots would grow by 47 percent worldwide to 143,700 in 2006, with three-quarters of these hotspots found in North America and Europe. In 2004, Gartner Inc. predicted that the number of frequent users of public WLAN hotspots in North America would grow from 700,000 to more than 4.5 million by 2006. Additionally, ABI found that "one major driver of WiFi hotspots is retail establishments." According to Daily Wireless, a number of cities, including Athens, Georgia; Long Beach, California; and Portland, Oregon, now offer wireless hotspots.

Why WiFi?

Nomad Book House, a 2,700-square-foot store in Jackson, Michigan, which opened in 2005, offers free WiFi to "anyone who comes into the building," said Bridget Rothenberger. The bookstore has a coffee shop, and there are two main seating areas in the store and electrical outlets throughout the building. Rothenberger said the WiFi hotspot has proved "invaluable.... People use wireless all over the store. During our live music on Fridays, [it's been so busy] we've had people sitting on the floor using WiFi."

Nomad opened its doors offering wireless access. "It wasn't even a question," Rothenberger said, because she believed a WiFi hotspot would target the right demographic. "There are tons of college kids here; there are three colleges ... someone is always is using a laptop. And there are lots of business people here with Consumers Energy and a hospital nearby -- a lot of business people who use [the store] as a meeting place."

Overall, Nomad's decision to offer consumers a WiFi hotspot "was one of our smartest decisions," Rothenberger said. "It shows we're progressive, not some stodgy old bookstore. It's that extra add-on: 'And free wireless!' It really draws people in. I recommend it to every bookstore."

Trident Booksellers & Cafe in Boston initially offered its customers WiFi access in March 2002 as part of a coalition of stores that dubbed their program the Newbury Open Net (the participating stores are located on Newbury Street). Today, the bookstore has DSL access in the store with a wireless router, which now provides a more consistent signal. "We have coverage without any dropouts anywhere in the store," said Michael Lemanski, the store's manager.

WiFi users are generally found in the cafe, which is a full restaurant serving breakfast, lunch, and dinner, Lemanski said. "We don't really have chairs set up in the bookstore ... so people will get a cup of tea or coffee" and sit down and use the wireless connection.

And while WiFi is technically free, the store has a policy that states that anyone sitting in the cafe must purchase food or a beverage, so those that stay buy.

Trident established a wireless network because it was "something that customers had been asking for," Lemanski noted, and he reported that WiFi has been good for business. "There are plenty of regulars who come in here, who know they can sit down and get on the Internet for free, and there are plenty of new faces," he said. "It's definitely a draw. Most people in the cafe are getting something to eat or drink. It's good for business -- it's good for us."

Outwrite's Rafshoon said of the store's WiFi hotspot: "It's a great thing. We've had it for about two years. It brings in a slew of people, who do their work, surf on the Web." Like Trident, at Outwrite, in exchange for use of the wireless, people are asked to buy a drink.

Not only is WiFi free to Outwrite customers, it's actually free for the bookstore, too, which was a strong inducement to offer the service." There's a company that comes in and provides the service for free; [in exchange] users will see an ad for the company" when they log onto the network, Rafshoon said. "[The company] came to us. You can't argue with free.... It's a win-win for all parties."

The benefits for the bookstore are many. "You get more people in the store," Rafshoon said. "The crowd becomes more familiar with the store. And a fuller bookstore is a better bookstore and one that attracts other people.... It's competitive positioning. Not everyone reads books -- it attracts people who wouldn't normally frequent a bookstore."

At McNally Robinson Booksellers in New York City, customers are not required to buy anything in return for using WiFi, Sarah McNally reported via e-mail. "There is WiFi throughout the store, but it's used almost exclusively in the cafe," she said. The bookstore decided to open up a hotspot because "it seemed like the thing to do with a cafe that needed to build traffic. I think it was instrumental in making our cafe so popular."

The Spotty Dog Books & Ale in Hudson, a small town about two hours north of New York City, is a bookstore, a cafe/bar/lounge, and art supply store -- a pretty good combination by anyone's standards.

The store incorporated wireless, initially at least, for pragmatic concerns. As Kelley Drahushuk noted, the store's computers were put on a wireless network to avoid having to run cables from one computer to the other. "Our POS is on the Internet and I wanted to use it in the front and let it do its thing without a bunch of wires [running to the other computer]," which was some distance away, she said. "We just had to set it up WiFi." The store has seating up front in the cafe/bar area, where it installed electric outlets for wireless users.

Said Drahushuk, "It's just one more service to offer people, if you want to be that 'third place,' the more benefits you provide, the more they will use you."

The WiFi Challenges

Of course, any new venture brings with it inevitable challenges. However, based on reports from booksellers who spoke to BTW for this article, the hurdles in setting up and offering WiFi are fairly minimal and easily solved.

Perhaps the most daunting prospect in setting up a wireless LAN, at least for anyone over the age of 40, is simply the technological aspect. As such, for those who are not techno-savvy, it's best to have access to someone who is or have a company install the system for you.

Nomad's Rothenberger reported that her store's wireless setup came as part of package from the telephone company, and the company provided technical support. "I think I only had to make one troubleshooting call" when setting up the WiFi, she said, and added: "Actually, one of the biggest challenges is not being able to be tech support for [new wireless users] in the store. That's the only drawback."

For Outwrite, the company that provided WiFi to the store for free also set up the network, making the hotspot "one of the easiest things we've ever done," Rafshoon said.

Another concern among those who are looking to open a WiFi hotspot is that people will come into the store, open their laptop, buy nothing (or very little), and never leave. This was certainly an issue, albeit a small one, at Outwrite Bookstore, where staff had to be trained to keep an eye out for anyone who might be spending too much time using the WiFi. "We explain [to any offender] that it is a small space, and we need to make it available to as many people as possible, but it's not a huge issue," Rafshoon said. "It's better not to make any hard-and-fast rules about it. You don't want to say that to someone when it's 10:00 in the morning and there are two people in the store."

McNally had a "horrible time" with people milking the wireless LAN all day. Then, she said, "my cafe manager came up with the idea of getting rid of the plugs in the cafe. So, everything is free and friendly and easy, but a visit is limited by battery life."

"We had concerns initially that people would set up there all day," said Spotty Dog's Drahushuk, "but it hasn't happened. People are polite. They come in and have a couple of beers." The only problem the store has had with the WiFi hotspot is "when someone wants to download a huge file" and it slows the entire network. "But that's only happened a couple of times."

WiFi Security

One of the most publicized concerns about WiFi hotspots, and wireless technology, in general, is security and how to ensure it.

For instance, since wireless networks, by definition, are not bound by four walls, it's conceivable that users outside of the retail establishment could access an "open" network. Just recently, there have been news reports about a "bandwidth hijacker" who used someone's open WiFi network to download or view illegal materials on the Internet.

However, many security safeguards suggested by experts -- such as using anti-virus software and firewalls, and not e-mailing passwords or credit card information over an open network -- tend to fall to the individual user (and, along those lines, booksellers would also want to avoid transmitting sensitive financial data over their store's open network, as well). For instance, JiWire, a web directory of WiFi hotspots created by executives from CNET and Ziff Davis, offers a comprehensive and easy-to-understand guide to wireless security.

McNally Robinson, for one, has had to deal with people accessing its WLAN after hours. "We have had security problems that we never figured out," McNally noted, "but we reconfigured our network, and we now unplug our WiFi at night so that people can't use it from the street after hours."

Regarding users' security over the WiFi network, Lemanski explained that WiFi users tend to have their own personal firewalls in their laptops to prevent hacking.

"Wireless is a free, open network, but you have to be careful anywhere," he said. "There's not much difference between that and any other [network] connection." --David Grogan

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