Today Starbucks was crowded with people queuing up, obviously, to buy something. I thought it must be their usual lunchtime rush and decided to return back later. I don’t have the time to wait in such a long line on a weekday! When I went back, after lunch hours, there was a bigger queue!! I wanted to know what it was all about. Turns out that it is Starbucks’ 'giving gifts' offer time. Today's offer, in Singapore, was ‘buy one get one free’.
Personally, I don’t get this! Wait in such long queues on a weekday at 3PM! The people, who had lined up for free drink, were all those who worked in neighboring offices dressed in their swankiest formal clothing. They had lined up to get a free cup of drink!!
Note that you have to buy Starbucks’ tallest cup venti whose capacity is 590ml. You are buying a size, which you generally don’t buy, and get another similar sized free! Claiming the free drink might save you a few dollars. But what about the 20-30 minutes you spent in the queue. Time is money after all!! And what is Starbucks’ strategy? Assuming people all around the world queues up to "buy" the free drink, Starbucks gets a big boost in sales on that day! This one day sale is more than what it sells probably in the whole month!
I remember reading this article sent by one of my dear friend some time back. It details the marketing strategies malls use to lure customers. It explains Starbucks strategy:
“Marketers observed…that discount offers such as ‘buy one, get one free’ or ‘three for the price of the two’ – a concept I am very keen on because this is how bookstores often package up their offers—tend to be more effective in boosting sales than the exact equivalent price reduction on a single purchase. The amount of money which is paid for the bundle of products is identical in each case, but more will usually be bought if they are packaged under an offer than if there is a simple equivalent reduction in the individual prices.”
I have fallen victim to few such marketing strategies. Once I had been to a nearby mall to get a haircut. There was a sale in the neighboring shop selling T-Shirts. I didn't intend to buy a T-shirt in the first place. But I went in to just browse. A really nice looking T-shirt was on sale with ‘1 for 20$, 2 for $30’ offer. I bought two similar T-shirts for 30$. In my defense, they were in two different colours. I went to the billing counter and the lady there told me about another offer. With purchase over 25$ I could buy a pair of flip-flops for just $5. Hey come on, that was a good deal! I bought a pair of flip-flop too!! It was not exactly loss to me. I used all of those. But, if they didn’t have that offer, I wouldn’t have bought any of those at all!
Another marketing strategy that I have fallen for a few times is collecting stamps at grocery stores. The scheme usually is that for every X$ you spend you get a stamp. If you spend 3 times X, you get 3 stamps. And this scheme runs for a specific period of time. I used to go to that store every time for my grocery shopping to earn more stamps. Also I would buy extra things to meet that multiple of X$, so as to not fall behind, by couple of dollars, to get a stamp!! By the end of it I would get a ceramic plate, bowl or something stupid like this!! I collected stamps twice and realized I was getting obsessed with collecting stamps and spending only at that store.
I, now, leave home with a list of things to buy, stick to the list and not look at any offers no matter how tempting it is. Because, simply, I don’t need it! The only time I look for offers is after I have had that item on my list of things to buy. It took some time to reach this stage. What I haven’t learnt, yet, is to get better deals for things that I have to buy. I am better at this while shopping online. Otherwise, I still have a long way to go!!