A Year in Lattes.
What building and managing our own coffee shop/innovation lab taught us about the future of retail.
One year ago, Huge leased a street-level retail space in its office building in Atlanta and opened a cafe. At first blush, it was a head-scratching move for a digital agency. But the thinking was this: Instead of building an internal lab stocked with the latest high-tech toys nobody really uses, the coffee shop would serve as a retail test lab and innovation center where we could quickly throw experimental ideas at consumers, gauge their reactions in real time, and refine concepts.
Since its opening, the cafe has served up as many prototypes and insights as lattes and cortados, informing our thinking about technology, employee engagement, and the future of retail. Like any other agency, we spend a lot of time inside the walls of our offices and our clients’ headquarters researching, architecting, and hypothesizing new concepts and digital experiences. The difference is that we have the full freedom and flexibility to implement ideas in our own retail space so that we can learn and validate before recommending, proposing, and rolling out work to clients.
Opening and managing our own retail storefront has given us a different, more well-rounded perspective about where growth and efficiency opportunities lie. At the Huge Cafe, we’re responsible for the full breadth of the retail operations. From health inspection and permitting to menu creation and pricing—we’re not just thinking and learning about someone else’s business. Instead, we’re operating the same type of business end to end, albeit a single location and a smaller footprint. But there’s nothing small or singular about the learnings and R&D potential.
Recently, when Huge demonstrated a prototype for advanced integrated ordering, point of sale, and digital service experience to the CMO and executive team of a leading retailer, we didn’t give the presentation in a conference room; instead, we organized it in the coffee shop. Similarly, when we were conducting research for an in-store digital experience for a financial services client, we didn’t just do qualitative research. We took it into our own retail environment to gather data and perspective from real users. Ultimately, findings from the cafe have informed strategies and innovation for a quick-service retailer, a national movie theater chain, and a top bank brand.
There was already a cafe on our corner of Peachtree and 17th NE Streets. Its coffee was so bad that the crew at Huge would go a few miles out of their way to get specialty brews from the more authentic spots in town like Octane and Condesa. Employees joked that if the shop ever went out of business, they’d take it over. So when Lattetude (yikes) went out of business, we drew up a business plan and began designing and building every inch of the 1,100-square-foot caffeine-infused lab. (A side benefit of opening the cafe: It allowed us to get our name on the building façade without leasing two more floors of office space.)
The maxim at Huge is “make something you love,” but first we had to get rid of everything we hated. The one thing we asked the contractor to try to salvage was the chocolate-colored wood flooring; once it was sanded down, it was a blonde birch that became the foundation for a minimalist interior. In addition to the overall aesthetic, Huge designed the menu and the typographic signage on the walls and glass frontage. “We did everything from the design to the business plan—it all literally came from the minds and hands of the people here,” says executive creative director Derek Fridman. Huge pays the bills and has ultimate say over the menu and pricing, while food-and-beverage partner Karl Injex, of Atlanta night club Sound Table, handles staffing, bean orders, and food prep.
To customers, the cafe is a just a cafe with a cool sensibility, free WiFi, and Brash coffee. Its role as an innovation lab is less apparent. “The people who get that the cafe’s a lab expect it to be like a video game arcade, with touch screens all over the place,” Fridman says. “But our perspective is that some of the best technology exists in the background to eliminate pain points in both customer and employee experiences.”
The linchpin of that philosophy at the cafe is the Apple Watch. Huge designed and built a beta app to allow employees to place their order for pickup and have it waiting for them when they arrive downstairs. The order lands on the barista’s watch as a noiseless haptic tap on the wrist, so she can attend to her other customers using two hands—serving drinks, making change—without them even knowing that she has an order waiting. Then, when the last in-person transaction is finished, she can turn to the watch.
Apple markets its watch as a consumer device, but the cafe proves its usefulness as an employee assistive tool. Its business potential becomes even clearer in the second version of the app, currently under development. This new iteration will leverage a customer’s geographic proximity, taking into account location and traffic patterns to determine her arrival time and where, accordingly, her order should fall in the queue. The watch can also monitor employees’ biometrics, such as heart rate, to see how they’re handling stress during a rush, and figure out ways to alleviate the pressure by better preparing for predictably busy times.
The ultimate goal is that the app will anticipate the customer’s wants—including those she didn’t even know she had. For instance, it might know that she’s driving to work on a weekday and send a push notification asking if she’d like her usual morning Americano. At the next stoplight, she can respond with a “Y” or “N” via Messenger. “The application becomes something that you don’t really use,” Fridman says. “You just wait for the coffee shop to reach out to you.” In other words, it becomes one less thing to coordinate in an over-packed workday.
But what about managing all the orders that happen in the cafe in real time? We originally experimented with a travel mug packed with radio-frequency identification (RFID)—the same technology Disney employs in its famous MagicBand wristbands, which visitors use for everything from unlocking hotel rooms to entering theme parks and paying for food and merchandise. But there was a snag with the mug idea: Having one docking station meant that only one customer could get served at a time.
What would work, though, is a projection-based ordering system. In this concept, every Huge tumbler would have a unique symbol on its top recognizable by a camera above the countertop. Once the software in the camera “recognizes” the cup, a projected welcome message (“Hello.”) encircles the tumbler and acknowledges the customer’s preferred drink refill, which is saved in her profile. The barista will be notified that a tumbler has arrived via the Apple Watch and can then fill the request. Once the tumbler is returned to the pickup counter, a “done” message appears, along with the customer’s name. The cafe will most likely debut this in the fall, when hot drinks are more popular.
Using the Cisco Meraki Cloud’s heat-mapping capability, the cafe is able to track traffic patterns in and around the location. The system records the number of people in the store at any given time, provided they have a phone in their pocket that is actively seeking a Wi-Fi connection and will pick up our SSID. This offers a sense of how people move around the cafe—whether they’re placing to-go orders, sitting inside, or lingering outside.
The cafe can also pick up signals of passers-by to compare foot traffic to customer visits: How many people peeked in the window but decided not to open the door? It can shed light on whether changes made are effective: Does the added signage draw more patrons off the street? Are customers coming from Jimmy Johns, the sandwich shop next door? The cafe also captures customers’ media access control (MAC) addresses, the unique identifiers assigned to network interfaces, and can tell repeat visitors by device. With the 2.0 app release, the cafe will have the ability to attach these devices to a user name. By combining the personalized “hand raise” of customers with the device identity, we can analyze historical visiting patterns and send them targeted messaging and personalized offers to encourage them to visit, especially during traditionally low-traffic hours..
Experiments in AR.
One of the primary advantages to having a cafe is that Huge can quickly implement ideas without considering how they’ll scale, applying for go-ahead, or jumping through bureaucratic hurdles. If it’s within the technological and operational capacity, it can be done. “The value of the cafe is that we control the footprint, so when we have ideas, we can vet and execute them,” says Michael Koziol, president of Huge’s Atlanta office. “We love coffee and coffee shops and are proud to have the Huge Cafe recognized as one of the best in Atlanta, but our primary purpose for doing this is to learn. So when we go to clients with these ideas, we’ve tested the concepts on our own dime, in our own place, and with real customers.”
Case in point: Just after the Pokémon Go craze hit, the cafe kicked off an experiment to see how a modest investment in in-game currency could impact sales. It yielded an impressively high return.
Pokémon Go launched in the U.S. on July 6. Within days of launch, it had more daily active users than Twitter, and players were spending more time in the app than on Facebook. The cafe was uniquely positioned to turn players into customers, since it is located between two Pokéstops (virtual depots for picking up free game-related loot). The cafe bought some Lures to see whether they’d attract gamers into the shop.
That first day, a few new customers straggled in for a drink, although most of the Pokémon activity remained on the sidewalk outside. As one of a handful of businesses deploying Lures, however, Huge got some media attention and after a few days, visitors were holding down tables for hours at a time. Across the week, the cafe saw an ROI of 400% on activating Lures. More important than the payout, however, was what Huge learned about leveraging the transformative power of AR in retail spaces.
Cafe today. Tomorrow, who knows?
Opening a cafe made sense. Huge wanted experience running a food-and-beverage retail business, and there was a need in the area for a small-batch coffee purveyor. But the space could ultimately serve as almost any sort of experimental retail zone—a design shop, an art gallery, a boutique. As Koziol says, the objective behind the cafe isn’t to dominate Atlanta’s coffee scene. In fact, the space was designed to anticipate a quick pivot with a few interior changes and a coat of paint. “Who knows, we could turn it into a hair salon,” Fridman says. “We don’t even have to sell food.”