When you're a small independent company in a market dominated by gargantuan global über-brands, how do you compete?

For Urban Coffee Company, a tiny concern that until recently had only one coffee emporium, located in the middle of Birmingham's business district, the answer is technology and innovation. Oh, and great coffee, of course.

It offers free Wi-Fi, embraces the so-called 'digital nomads' who come into the store toting iPads, smartphones and laptops, gives its Foursquare mayor a free coffee every week, exploits Twitter and Facebook, and even has its own app to let you order your cup o' joe on your iPhone before you arrive.

We went to meet with founder Simon Jenner to find out - over a cup of coffee, naturally - how Urban Coffee is out-innovating Starbucks, Caffè Nero and Costa.

Staff

Let's start with the iPhone app. "We originally looked at an app early last year and got a few speculative quotes," says Jenner. "They were coming in at £6,000 and more, and given we couldn't see the app being a clear revenue generator, we couldn't justify getting one at the time."

Happily, one of Urban Coffee's regular customers had been experimenting with developing for iPhone, and was looking for a project to focus his new skills. "One day, I had a sudden eureka moment that a coffee shop app would be a great first project," says Scott Remnant, a developer who now works for Google. "I wondered why Urban, with its tech-savvy customer base, hadn't got one already.

"I had an idea of how the flow of the app should work, so I created a quick mock-up of the process on my iPhone for the first meeting with Simon. When we met, I was able to give him an idea how it would work. The overall development process then consisted of a series of beta versions sent to a few people to make sure things were heading in the right direction and to get feedback. We had a few in-person meetings along the way, too."

The tech side of things, then, was quite simple; the only problems the company encountered were boringly real-world. "The major issue for us was not technical but to do with practicalities within the coffee emporium," says Jenner.

"How were the baristas alerted to the order, what happens if a customer didn't turn up, what happens if they were late and it had gone cold, what happens if we needed to stop taking orders; that sort of thing."

Social engineering

Coffee and ipad

That's a common concern of Jenner's. He'd like to evolve the app to add the ability to pay directly from your phone, either through Apple's in-app purchase mechanism or using an alternative such as pre-pay vouchers, as well as features such as a loyalty card.

Again, however, though the technical side of implementing these in the app is relatively trivial, integrating them into the till system in the coffee shop is impractical - tills are notoriously complex, archaic systems, and trying to get till manufacturers to do development work such as would be required here is traditionally ruinously expensive.

But while a company as small as Jenner's can't afford the tens-of-thousands of pounds of investment needed for this kind of end-to-end payment system, its small size brings other advantages.

Urban Coffee can move quickly to make small investments, such as in the app - which, though Jenner says he doesn't think it has directly driven any significant revenue, has contributed to the customer experience, building loyalty.

Plus the company can implement decisions quickly because there isn't a huge corporate structure. It can also build very close, personal relationships with its customers. For example: everyone at Urban Coffee, including every barista, has access to its @urbancoffeeco Twitter account, and is encouraged to post to it and respond to tweets from customers.

Sure, sometimes someone says something that makes Jenner wince a little, but he thinks everyone on Twitter understands that it's a conversation, and appreciates that humans are actually tweeting real views; Urban Coffee's Twitter feed isn't some bland, triple-approved corporate-speak.

Coffee

Jenner credits Twitter with some of the emporium's initial and ongoing success. When it opened in 2009, it kept an eye on people tweeting about coffee within a five-mile radius, and tweeted them directly to invite them to pop into Urban Coffee. What's more, he maintains that this active social engagement brought in a clientele that its business-district premises would otherwise have struggled to attract.

At the weekend, knitting groups, book groups and even a group of folks who get together to play board games ensure Urban Coffee is always busy, while many neighbouring businesses are almost deserted. And all this without any traditional advertising.

Location, location

FourSquare

Urban Coffee rewards its Foursquare mayor with a free coffee every week, but Jenner's not sure this is working as well as he originally intended.

"If you have a regular customer then it's very difficult to knock them off the top spot, and therefore what should have been a competitive thing becomes a fixed thing. That said, we do think geolocation promotional tools will be a critical battleground for retail over the next few years."

And Jenner has lots of ideas for what he wants to do over those next few years. As well as plans for expansion - with a second emporium just opened in Birmingham and plans for one in Manchester - he's keeping an eye on tech trends. He hopes to port the app to BlackBerry and Android, and is excited about the possibilities for instant, contactless payment that the rumours of NFC in future iPhone models will bring.

With 18 months' experience under his belt, then, what advice would Jenner give to other independents looking to stand up to the big boys?

"I recommend: invest now and innovate like crazy, because the big high street chains will not be able to keep pace. Independent coffee shops are already giving the high street chains problems, because we can provide a better cup of coffee by higher-trained baristas. If we now out-innovate them on the tech side, then we will start to see a change in the makeup of our high streets, which can only be a good thing."

Wake up and smell the coffee, Starbucks - tech innovation is helping little independents punch above their weight.

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First published in Tap! Issue 03

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