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TheStreet Open House

Tech, Small Business Can Learn Plenty from Starbucks

NEW YORK ( TheStreet) -- You have just got to be on the conference call for some companies. If you don't catch it live, stream the Webcast or, at the very least, read the transcript, you're only seeing what the financial media puts in front of you. A formulaic series of numbers that, while meaningful, do not tell the entire story, particularly with respect to a company as dynamic as Starbucks (SBUX).

People scoff at me when I refer to Starbucks as a tech company, but, with more than a cursory glance, it's obvious that mobile, social, digital and a sense of what's hip drives the company's most recent -- and ongoing -- hyper-growth phase.

In this article, I take a slightly different approach from my others. Because most of the media doesn't pull the real nuggets from conference calls, I excerpt the quantitative and qualitative stuff I consider most important. I use this information to make the case for Starbucks as a tech company. I close by explaining how local retail, particularly coffeehouses, must stop playing victim to the corporate behemoth.

The free-form style meshes nicely with the gritty, rough-around-the-edges, yet freakishly refined vibe we're nurturing with our still-evolving videos from TheBeach in Southern California.

So, from Starbucks FY13 Q1 earnings conference call, some seemingly random, though chronological and complementary blurbs:

This season, and for the first time, a Starbucks card was perhaps the nation's single most frequently given holiday gift, with one in 10 U.S. adults receiving a Starbucks card and $2 million worth of our exclusive first-ever steel Starbucks card selling out on Internet luxury goods retailer Gilt.com in only, believe it or not, six minutes.

I got my hands on a steel Starbucks card shortly after Christmas. It's a symbolic item, but it shows that Starbucks is more than a place to buy coffee; it's a daily habit, bordering on obsession for quite a few people. Like Lululemon (LULU) and Apple (AAPL), it's a lifestyle brand.

As such, it knows where it needs to be to resonate most strongly with its core customer:

And we will expand Teavana's current 300-store footprint from largely mall-based stores to urban street locations, where Starbucks obviously has very strong capabilities ...

Starbucks recently closed on Teavana acquisition. You heard the man; Howard Schultz will overhaul Tevana's absolutely awful geographic strategy. I wrote about it in July, 2011, on the eve of Teavana's IPO for Seeking Alpha in "Teavana Needs to Penetrate Urban Areas to Become a Buy."

At first blush, you might not associate mobile and digital efforts with a focus on "urban street locations," but it's there. Urban consumers tend toward mobile and digital adoption/savvy. Plus, they have disposable income. Like LULU, Starbucks locates where these people are; it infiltrates the best neighborhoods in big cities and, although the company doesn't break down sales, I would love to see an urban/suburban side-by-side of its sales.

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