Martin Hayward questions the long term strategy behind online vouchers.At both of the pizza chains in my local town, the waiting staff now spontaneously ask for vouchers before taking orders, such is the frequency with which they’re offered.
We’ve almost reached the point where if you’re not getting two for one, two for £10 or three courses for £10 then you’re really not trying hard enough.
The take up of online and subsequently mobile vouchers has been a fascinating example of how consumers can quickly learn new behaviours if there’s something in it for them. I’ve seen many office lunch trip destinations being decided by whichever voucher someone has printed off, and new mobile apps such as VoucherCloud mean that restaurant selection can be made on the hoof with location-based offers.
There’s clearly quite a lot in this for the retailers and restaurants that have embraced the new promotional channel – no print or distribution costs, and contact details for every user of the vouchers, but what is the long term game?
I now get an offer from Pizza Express by email every week, and if I can’t find that then I know that one of the online voucher sites will find me another.
Even though I always used to think that the chains offered reasonable value for money, my price expectations are being dramatically changed by this perma-promotion and paying full-price again will not feel good. If I eat there significantly more often than before then the revenue benefits will make it worthwhile, but I suspect that most people will eventually revert to the long term average frequency, just with a lower price elasticity.
There’s a danger that a new raft of suppliers and brands will now get trapped in the narcotic promotional cycle that many FMCG brands are now unable to escape. Is there anyone in the country who doesn’t know that every six weeks you can get 12 toilet rolls for the price of nine?
Once the benefits of reduced promotionally delivery cost have become the norm, it will soon be time to think carefully about long-term impacts on price perception and margin.
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