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The Questionable Economics of a “Good” Groupon

June 25th, 2011 | Posted by JMarek in Promotions - (Comments Off on The Questionable Economics of a “Good” Groupon)

This article in the New York Times, plus my interview in Fast Company, got me thinking again about Groupon economics.  To be clear, I’m talking here about the Daily Deal type offers, not more sophisticated customer-targeted, location-based, fill-up-empty-seats-right-now types of offers.

Here’s the crux, a restaurateur describing a successful Groupon in which a consumer receives a voucher for $14 worth of food by paying Groupon $7 ($3.50 of which Groupon pays the restaurant) :

“You don’t make money on the deal,” Mr. Massari acknowledged, “but in the end we are even.”

That’s because “people spend more than on the coupon amount,” he said. “They’ve been ordering about double the $14 from us. And people usually bring other customers, who are paying full price.”

Beyond that, among those who are redeeming coupons, “80 percent have come back without a coupon,” he said.

Let’s think through each piece of that, imagining for the moment we sold 1000 Groupons: (more…)

Restaurants Get Social

December 1st, 2010 | Posted by JMarek in Marketing & Media - (Comments Off on Restaurants Get Social)

Several high profile social media campaigns have made the news in the restaurant world, including Applebee’s Veteran’s Day campaign, Chili’s FourSquare chips & salsa promo, and McDonald’s, Starbucks, and Chipotle on Facebook Deals.

As these offers become more mainstream among major restaurant chains, the way restaurants invest in and measure social media will need to “grow up”, as we argue in this recent post on our media blog.

Making Money on Starbucks WiFi

June 15th, 2010 | Posted by JMarek in Capital Expenditures | Labor & Operations - (Comments Off on Making Money on Starbucks WiFi)

Starbucks Free WiFi offering is all over the news today.  Andrew Hickey at CRN had the most interesting analysis we’ve seen, giving 5 reasons why Starbucks is making this leap.  Reasons range from competition with McDonald’s to the simple fact that (short of trapping customers on an airplane) it’s becoming so you can’t charge for WiFi anymore.

Reason #2 is the most interesting, but stops short of the real point:

It’s all about targeting the consumer. (more…)

More Thoughts on Taco Bell $2

June 10th, 2010 | Posted by JMarek in Restaurants - (1 Comments)

Do we need more of these?

Taco Bell has now launched a petition for the Federal Reserve to issue more $2 bills, accessible through Taco Bell’s Facebook page.  There’s a full-page ad in USA Today, and the write-up on a Wall Street Journal blog is today’s most popular article on WSJ.com.  Of course, this is marketing the 3-item $2 Meal Deal promotion we discussed in a prior post (see Taco Bell $2: A Restaurant Trade Promotion?).

Here are five things what we love about this marketing tactic: (more…)

Searching for Mother’s Day Dinner

May 11th, 2010 | Posted by JMarek in Marketing & Media - (Comments Off on Searching for Mother’s Day Dinner)

From Google, via Eater.com, here’s a fascinating table of “hot” search trends around dinnertime on Mother’s Day.  6 of the top 20 are for chain restaurants.

Though anecdotal, this is the best evidence I’ve seen of ability of Search impact to drive restaurant traffic.  Many of the best retailers are already testing to quantify the impact of online ads on in-store sales (see our whitepaper).  Will restaurants catch up?

Tweet to Eat

April 16th, 2010 | Posted by JMarek in Marketing & Media - (Comments Off on Tweet to Eat)

“Tweet to Eat” is a neat little campaign from Subway, linking Twitter, TV spots, and celebrity sponsorship.  A cool mix of media that we haven’t seen before, especially in conjunction with the likely PR bump from being a leader here.

We see a lot of companies, mostly retailers, analyzing “online-to-store” activity these days.  Haven’t seen anyone really quantify the social media effect on real life sales yet, but the day is coming.