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Panera Bread Stores Overloaded With Wi-Fi Users Who Won’t Leave

Panera Bread installed free Wi-Fi years before Starbucks got around to it, trying to boost customers in between breakfast, lunch, and dinner.  The experiment worked, according to USA Today, but now Panera has a new problem: their Wi-Fi networks are clogged and customers won’t leave to make room for others.

Panera executives say the company connects 2.7 million sessions a month at its 1,565 locations nationwide.  The result is Wi-Fi that slow to a crawl, overloaded with dozens of customers trying to get online at the same time. The problem has gotten even worse since wireless phone companies began usage capping and throttling their customers. That brings data-hungry people to Panera for the free Wi-Fi, but they don’t always stay for the food.

Now Panera is considering rationing its Wi-Fi service and giving priority to its most-frequent visitors who belong to the company’s MyPanera loyalty program, rewarding them with extra time on the network or prioritized traffic that forces non-members onto slower connections.

That could discourage casual visitors and those not purchasing food to look elsewhere.  JiWire, which sells ads on Wi-Fi networks, estimates 55% of those using free in-store Wi-Fi are searching for a faster connection than their wireless phone company provides. If Panera forces them to use slower speed connections, they may go somewhere else.

Panera, like coffee shops and other eateries, all face the same challenge: how to discourage the freeloaders who spend hours occupying tables and seats without buying anything while not alienating the customers that do buy and appreciate the wireless Internet connection as a free perk.

As wireless carriers continue to charge more for less service, those challenges are expected to only grow in the coming months.

http://www.phillipdampier.com/video/USA Today Talking Tech Customers clog Paneras free Wi-Fi 5-17-12.flv

USA Today visited Panera Bread to find out whether customers went for the food or the free Wi-Fi.  (2 minutes)

 

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Currently there are 28 comments on this Article:

  1. Tk says:

    Put a 90 minute daily time limit per wifi device by Mac address, or limit the time by making people run their devices on battery (no outlets)

  2. James says:

    Why not put up a password, change it daily, and write out the password on people’s receipts? Solves the problem of people just being there for the WiFi and not buying anything.

  3. Scott says:

    Their CTO or whoever is in charge is failing spectacularly if this has been going on for 2yrs. There’s a number of vendors, one such as Meraki that provide Wi-Fi access points built specificly to address serving public wi-fi either free or paid, and allow for restricting access to timed periods such as 15, 30 minutes, etc.. Or by giving out one-time codes.. You can then even block service and require the customer to purchase additional time beyond their free period for a nominal charge (or they could always buy another coffee and get another free code).

    • Smith6612 says:

      True. All of the above works fine. Even then though, I don’t think they need to spend money replacing their current gear with something from Meraki for example if many of the shops I’ve seen run Captive Portals on their Wi-Fi. While I’ve never administered such a setup for Panera, it may be possible they simply VPN all of their traffic over a corporate network or they already have something running locally via a router (or perhaps via a DD-WRT unit). It’s not too hard if they’re already running a captive portal to get time restrictions up. Takes some time configuring to be “Just right” but that’s about it.

      A local Subway shop in my area runs their Wi-Fi off of a 3Mbps DSL connection. I don’t really see people using the Internet there and the shop doesn’t draw attention to it too much, but they put a password on the Wi-Fi and put it in such a place where you have to buy something in order to even be able to see the key, since it’s hidden with the Cashier on the wall. That’s really their way of broadcasting it’s presence, and of course, you do have to pay to get the key initially. As far as freeloaders go, I’m not aware of anything else but the shop for a Subway has a ton of room in it and no outlets by the tables.

      I run a Wi-Fi Hotspot at a nearby business as well, and for the most part it’s mostly phones connecting to it. When the business has large events going on it’s not uncommon to see the newer Wireless N AP holding 100+ devices. The network handles it just fine, problem is the Internet connection will get bogged down. I have QoS in place to at least keep the connection responsive despite a heavier amount of load for page loads, and to give priority to the trusted machines of the network on a separate VLAN (Wired/secured Wireless). This is on a not-quite 3Mbps/768kbps DSL line from Verizon that clocks 2200kbps/600kbps due to the length of the line. It does perform pretty well, needless to say though. Of course, this place has no worries of freeloading since you cannot get the signal outside without some really good gear, and the building is pretty spacious. Plenty of laptops do hit the Wireless but they are typically on there when there are huge events going on or there’s a ton of tables set up (and there are power outlets free).

  4. txpatriot says:

    Interesting situation.

    The commenters providing suggested solutions are even more interesting, but what I find MOST interesting is that, provided with a real live case of uncapped usage hurting everyone, Stop-the-Cap and author Phillip Dampier have absolutely NOTHING to suggest to deal with the problem. I guess I should be grateful that STC bothered to mention this case at all, rather than burying it. So STC I’m calling you out: should Panera “cap” its abusive free-riders, or not??

    What say you?

    • Tk says:

      Perhaps Phillip is blaming the wireless phone company caps for this situation at Panera.

      “The problem has gotten even worse since wireless phone companies began usage capping and throttling their customers. That brings data-hungry people to Panera for the free Wi-Fi, but they don’t always stay for the food.”

      I don’t think Stop the Cap is against there being limits on free Internet services like this, but when we pay to subscribe to a service there should not be a cap, especially for landline services like fiber, cable, and DSL.

    • I don’t have any position to take regarding Panera. It’s a free Wi-Fi service. If I go into Panera Bread, I am honestly there to buy their food, not their Internet service. If I am doing business with Verizon, AT&T, or others, I am paying them good money for Internet access, which I increasingly find curtailed or throttled. Is that my business? It sure is my money.

      If you watched the video, you will see a sign at the 0:30 mark which I found interesting. That overcongested Panera network is trying to support a panoply of wireless users on an 802.11b Wi-Fi network — technology I abandoned in my home several years ago for 802.11g, and since then, 802.11n.

      I’m not surprised speeds slowed. Panera maintains an exclusive contract with Wandering Wi-Fi to provision their service, and the local ones here use dreadfully slow DSL. So if you have an 802.11b Wi-Fi network on a 3Mbps DSL line and 20 customers are trying to share it, it’s hardly a surprise there are network slowdowns.

      So what are the solutions here?

      1) Throttle/cap your patrons? It is a free service extra, so if Panera does not want to invest anything more in it, there are no paying Internet customers to demand better. But customers may look elsewhere, either returning to their 3G/4G connections, or find a restaurant that does have decent access. When I am not paying for the service, I would find it personally rude to demand something better. But I can offer some advice:

      2) Upgrade the network to support bandwidth needs. Business Class cable modem service from a company like Time Warner runs around $70 a month for 7Mbps service. Faster speeds are also available. An 802.11n router would also support an improved wireless experience and offer fall back to older technologies.

      That means a one time equipment upgrade charge, and possibly a broadband vendor change.

      Ultimately, Panera’s first priority is to sell food. If another restaurant opens up nearby that delivers equivalent types of food and a faster Wi-Fi experience, will that drive people elsewhere? Perhaps. If I am there for the food and couldn’t find a table before because people were using the place as a virtual office, I am not so sure I’d mind a lousy Wi-Fi experience too much.

      You should not read into every story written here as an effort to prove some point.

      In this case, it was just an interesting story to share with readers as Internet access continues to become a fundamental part of our life.

      • James R Curry says:

        Hey Phillip,

        It’s a thorny subject. There are a lot of coffee shops that set themselves up as places for people to come and meet and work and study; it’s quite prevalent in student towns.

        Such places turn a small profit on these sorts of customers as they undoubtedly order things throughout the day, and they generally have the space. A lot of coffee customers are to-go orders, anyway, so I expect it doesn’t hurt them too much.

        This sets an expectation in the customer’s mind however that this is acceptable when they visit a place like Panera Bread, which is a hybrid coffee shop and restaurant. I imagine that they see the bulk of their business being people who come in for a meal. At least those would be the most profitable customers.

        So the problem isn’t really the fault of the customer, or of Panera Bread themselves. I think it’s more to-do with them inhabiting a grey area between restaurant and coffee shop.

        Just my thoughts, anyway.

      • txpatriot says:

        “You should not read into every story written here as an effort to prove some point.”

        Of course not — that’s why the website is titled “Stop the Cap” . . .

      • Scott says:

        You’re partly correct about a new access point or router helping them.

        The problem with consumer or lower quality wireless access points is they do not distribute bandwidth evenly across lots of users.

        On a cheap linksys with 10mbit, you may have one user pulling down a video getting a whopping 5mbit, while the 10 other users visiting other bandwidth intensive sites and randomly get divied up paltry shares of 256kb/s – 768kb/s, etc.

        Of course the other issue is at some point you can only get so fast of a connection or justify it as a perk for customers, and as I noted above you need better hardware to limit access times and cut off freeloaders. The better equipment from a number of non-consumer manufacturers provide full visibility into your wireless network allowing you to see actual activity and deal with any potential abuse too.

        It just sounds they took the easy way out, outsourced their wireless service and management to a 3rd party that has zero incentive to properly run it after the initial setup.

  5. Alex Perrier says:

    Another option is speed caps. i’ve experienced speeds of anywhere from 1 Mbit/s to 6 Mbit/s at Bell Wi-Fi hotspots. i think this is reasonable. Those who want higher speeds can normally get FTTN at home.

  6. rebecca landry says:

    i go to wilmington ma panera and wifi not working today…when can i expect it to be up and running again…there was only myself using wifi this am..thanks

  7. Just catching up with this. I use public wifi, and I always make a food and drink or book purchase when I do because I know that the wifi in most public places attracts too many freeloaders.

    I would not be the least bit miffed if Panera’s set a cap on either speed or time (or any place for that matter–I work in a public library, and we offer free wifi, and we get all day visitors who don’t have cards and don’t use our other facilities who settle in, try to eat their lunches, etc. and I am pushing for US to have wifi limits to stop some of the less savory sorts from moving in all day).

    Seems to me if you want unlimited wifi, you need to pay for the service rather than hog it at the stores. Frankly, I do little more than check email when I am at any of the public wifi places. I tend to go there to eat and to get some writing done in a place where my family won’t pester me. ;-)

  8. LJW says:

    Let’s apply some math to their problem. 2.7 sessions per month over 1,565 locations. Let’s assume 30 days per month and the sessions are spread out equally. That’s 1726 sessions per month per location. That’s 57.5 sessions per day per location.

    Doesn’t seem like too much of a problem. Of course I’m sitting here in a Panera in Cary, NC typing this. The problem I see is that no one is here. The problem I have is that the Internet connection is a T1. Literally, my phone is faster than that. I know 50/5 cable modem service is available because I’ve installed it in several restaurants in this same shopping center!

    My inclination is to find another location to meet clients and have breakfast/lunch. Their problem isn’t the Wifi, it’s lack of customer service. Any CEO who thinks the wifi is bumming out their profits is an idiot. I’m sure that their are plenty of locations with much more congestion, it’s Panera’s inability to monetize these clients.

    How about a wifi ordering, sales, coupon offers for customers in store? I’m here to meet and eat. If you don’t want me here, keep everything the same. I’ll find another location who fits my needs better.

    When a company complains that it’s customers are the problem is hiding the real problem: management.

    • txpatriot says:

      What do you say when a customer complains that a free service is not adequate?

      • People will just take their business to someone else’s bread company/casual dining if Wi-Fi is that important. Hotels are learning that lesson right now. If that is important to Panera, they will do something about it or lose customers to someone else that does better.

        • txpatriot says:

          Phillip: have you heard of the “tragedy of the commons”?

          If an otherwise costly service is provided for free, there is NEVER enough of it to meet demand. The more capacity Panera buys, the more freeloaders will show up to use it, get it? For the life of me I can’t understand how a business can give customers a free service, then have those same customers turn around and complain there isn’t enough of the free service!

          We’ve built an entire society of people expecting free stuff . . .

          • Free Market. Companies either respond to it or die by it. This is the inconvenient truth that comes with the marketplace. Value is in the eye of the beholder. If the competition is handing out free fiber speeds in their store, everyone else better be willing to match or a sufficient number of customers will walk out the door and never come back.

            i personally don’t care whether Panera has Wi-Fi or not. I don’t even like Panera that much.

            High expectations isn’t the exclusive domain of greedy customers. Executive compensation expectations well exceed it, but you’ll hear the same “we do it because the other guy does it so we have to be competitive” excuse for both.

            • txpatriot says:

              Yes the great thing about the free market is that customers can vote with their feet, whether they don’t like the food, don’t like the wifi or don’t like the CEO’s pay.

              Maybe its just me, but I’ve never sat in a McDonald’s and complained under my breath “Darn this free wifi — too darn slow”! I was thankful to have it, but like I said, maybe that’s just me.

      • Scott says:

        Something along the lines of “You’re right Sir, clearly we underestimated demand in providing a free WiFi service, and we’d like to continue offering it while providing the same great experience you also get in our store.”

        If they have no intention of fixing or improving it, they should just shut it down rather than offer a sub-par experience that only damages their customers enjoyment of their store likely resulting in them going elsewhere.

        Otherwise it should be addressed with better hardware with QoS options and increased bandwidth for locations where the QoS management settings aren’t enough.

        • txpatriot says:

          Wow, the sense of entitlement evident here is beyond belief . . .

          • LJW says:

            If this were some sort of charity, then I’d agree. However, Panera is complaining about having customers in their stores. Most businesses see this as the biggest hurdle to overcome. Once in the store, it’s simply a sales job to make money off of them.

            Today, I planned to eat lunch at Panera, however since their Internet was intolerably slow when 5 people were there, it was useless when the lunch crowd came. I had to just leave because I couldn’t work. Didn’t bother to buy any food. Had the Internet service been decent, I would have stayed, eaten, and then moved on. The store was nowhere near capacity at any point.

            Like a lot of chains, they come on the scene gangbusters, then eventually they blame their customers for their financial problems, then they die. Business just isn’t that complicated. A 50/5 link costs $250/mo. That’s $0.15 per session on average. You think maybe they could come up with a way to make an extra $0.15 per session? I had a bottle of water when I got there and it costs $1.75. I can get those at Sam’s for $0.15 in the 40 case size. A gross profit of $1.65 more than covered my session. Had it not sucked, I would have spent at least $10 on lunch, possibly buying some goodies to take home.

            It’s just not that hard. Get people in your store, sell ‘em stuff. If you’re complaining that people are coming to your store, but are staying too long, then you don’t really have a customer problem, you have a sales problem.

            I’d bet that a deeper look into the books of Panera would show that the surfers have nothing to do with their problems. Just another CEO trying to deflect a poor management job.

  9. Adamo says:

    Good post LJW. Agreed.
    Today, I walked into Panera at around 5pm. My intention was to work on my laptop while having a coffee and then more than likely, ordering something to eat for dinner. I wasn’t aware of the 30 minute wifi limit. (otherwise I would have scratched Panera off my visit list. At around 5:30, I was starting to think about what I should order for dinner. In the middle of my research, I was kicked off the internet for surpassing my time limit. I spoke with the manager. Nothing he could do. So instead of spending $10-$15 on food, I left. I spend $10-$15 a day at cafe’s. Panera’s just lost out on my potential $200-$300 a month revenue because of this silly and shortsighted rule.
    Blaming clients for this rule is silly.
    You either offer Wifi or you don’t .

  10. PaneraSucks says:

    All Panera has to do is stop being cheap and get rid of the 802.11b garbage they use and jump on an 802.11N connection powered by an un throttled Cable connection and the problem is solved. It’s not too hard to understand yet Panera is so cheap they insist on making the wifi slow and unusable. Panera Bread wake up and upgrade your system you cheapo’s!







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