The battle for Share of Stomach continues to drive customer migration from traditional foodservice retailer the ilk of grocery stores trying fill your pantry and chain restaurants try to get you butt into seats inside their restaurants to new non-traditional fresh food retailers.
According to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® many of the new non-traditional fresh food retailers have integrated technology that reduces the cost of customer acquisition; thus trial and migration.
Here is an example how a strategic partnership can help food retailers create new electricity according to Johnson. In an effort to attract millennials to its platform, Square is offering a pilot program that gives its Square Cash Card customers a dollar off their coffee purchases. The effort could change millennials’ payment behaviors.
Mizuho Analyst Thomas McCrohan noted, “A $1 coffee reward is enough incentive to create habits, including migration of non-coffee spend volumes onto the Square Cash physical card. The long-term play is to use coffee rewards to drive habits, which in turn will result in more of the $2,946 spent annually on food away from home by millennials to be spent on the Cash Card.”
Square customers can take the discount to “any establishment that mostly sells coffee and coffee drinks,” according to Square’s website. Through tests of the program, McCrohan believes this includes Dunkin’ Donuts and Starbucks stores.
Remember technology in most cases edifies customer relevance with brands particularly Gen Z and Millennials according to Johnson. To be sure Square may lose money on the program. It must be noted Square could take in $100 million in fees if just 5 percent of millennials began to use their cash cards to purchase food “away from home.” Square’s transaction costs could be minimal, as users of the app pay for their purchases with the balance already in their accounts.
According to Recode Square revealed that 7 million people used its Cash app during the month of December in 2017., , explaining that the 7 million “active customers” either received or sent money using the Cash app during that month. People who only opened the app were not counted in the metric.
In addition, Cash customers spent more than $90 million during the month, with the No. 1 and No. 2 most popular merchants on the receiving end of Cash payments being McDonald’s and Walmart. Now is that a partnership that could edify your sales? Where is your new electricity?
What is your cost of customer acquisition? How are your reducing your cost and building customer relevance? Do your food marketing tactics look more like yesterday that tomorrow? Visit www.FoodserviceSolutions.us for more information or contact: Steve@FoodserviceSolutions.us Remember success does leave clues and we just may have the clue you need to propel your continued success.
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