Subscription Services Have Entered The Restaurant Industry

Updated: Jan 19

Bonji Hot Takes: Volume 5

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How Panera is Changing The Game

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Hi all, welcome back to Bonji Hot Takes, where we address some of the opinions and knowledge that we've picked up along our journey in the industry. We are here to offer assistance, stories, and hopefully some value! This week we are diving into Panera's coffee club subscription service that has been gaining a ton of traction as of late. Panera may have changed the game by offering a free coffee or tea (every 2 hours) for a subscription payment of $8.99 a month. This service alone has skyrocketed guest frequency by 200% and increased food orders with coffee by 70%.

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Alright, we know that Panera coffee is truly nothing to rave about. It's an average cup of joe and certainly not Panera's specialty. Yet, their coffee subscription service is boasting over 500k paid subscribers. There was a time during the heat of the pandemic in which Panera was even offering this service for free! They knew that if people would visit their restaurants for free coffee, they would be likely to purchase food along with it, helping their revenues grow even more. As a matter of fact, 35% of the subscribers were new customers to Panera! Imagine gaining another massive group of customers simply because you are offering another random, average at best, product for free. Panera saw the rise in mobile ordering and a need in the market during a difficult time for many on-the-go people. Restaurants by the hundreds are now joining the subscription service world, both large, like Taco Bell and Sweetgreen, and small. In fact, 55% of New Yorkers say they would consider a restaurant's subscription service. Additionally, 5% of New Yorkers also say they would try their favorite restaurant's subscription service simply just to keep the business afloat. Some potential special offers that interest the public are free delivery, discount codes, or a free drink. All of this leads back to Panera disrupting the loyalty program business. Panera knows that coffee isn't their top of the line, but it doesn't have to be. Overall, this goes to show that if you perform extremely well with your flagship products, why not offer something more to get people in the door. Some may laugh at the idea of free Panera coffee, but we call it genius marketing.

  • Subscription services have entered the restaurant industry!

  • 35% of Panera's subscribers we new customers

  • 55% of New Yorkers say they would consider a restaurant's subscription

  • Offer free delivery, discount codes, samples of new products, free drinks

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Final Thoughts: We've discussed loyalty programs in the past, but Panera has elevated the concept to the next level. So many companies, like Buffalo Wild Wings's $99 football season wing deal, are hopping on the “subscription” model. Not every deal makes for a subscription, but this simply shows that the people want new options and special discounts in one way or another. Additionally, it gets people in the door! Just think, you can boost your slower months by simply adding a new menu item that customers can sample for free! They may not even absolutely love this new item, but it gets them in the door and ready to support your business in some fashion. Finally, it's important to note the trends that have led to this revolution: “In TD Bank’s 2021 Restaurant Franchise Pulse survey, operators noted that their top areas of investment in 2022 include mobile ordering (54%) and delivery services (47%).” All in all, be on the lookout for key trends, you never know when they may spark the next big idea for the industry or simply your own business's growth.



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