Source: shop.sweetgreen.com; Photo: Sweetgreen
Will customers subscribe to Sweetgreen’s plan to make pricey salads less pricey?
There’s nothing cheap on Sweetgreen’s menu, which may explain a new program from the chain that offers customers daily discounts of up to 30 percent on purchases.
With the company’s new Sweetpass program, customers can buy a $10 pass which rewards them with a $3 credit daily for 30 days. There is a minimum order requirement of $9.95. The offer is available for customers at the chain’s 140 stores who place orders on its website or through its mobile app. Discounts are not available for orders placed on DoorDash, Uber Eats or other third-party apps. Sweetgreen customers can purchase a Sweetpass through Jan. 16.
Daniel Shlossman, senior vice president of digital and growth at Sweetgreen, told CNN and CNBC that the timing of the program was tied to Americans’ resolutions to eat better and live healthier in the new year.
Mr. Shlossman said that Sweetgreen, which abandoned its loyalty program last year, is looking to avoid a “one size fits all” approach with efforts such as Sweetpass.
“It is everything from targeted and personalized offers to digital challenges to subscription and membership, and how can we potentially play in that space,” he told CNBC. “We’re re-envisioning the future of loyalty at Sweetgreen and this is one step in that journey.”
Sweetgreen, like other restaurants, has seen its digital business grow its overall market share during the pandemic. The company said that nearly half of its sales during the third quarter were placed online or through an app. Digital customers spend about 20 percent more than those who place orders in its restaurants.
A new TD Bank survey finds that the pandemic appears to have permanently altered the relationship between restaurants and their patrons.
“Consumers have become accustomed to the speed and convenience of mobile ordering and delivery, which in turn, has changed the restaurant franchise landscape,” said Mark Wasilefsky, head of restaurant franchise finance group at TD. “Even once there is no longer the active threat of the pandemic, consumers will still turn to these mediums. Mobile ordering and delivery have become a part of everyday life and are no longer nice to have, but expected, and operators need to continue to enhance these offerings to keep up with competitors.”
Restaurants are reconfiguring their businesses to meet demand. According to the survey, 55 percent are adding space for pickup, 45 percent are expanding drive-thru locations and 43 percent are designing locations to provide more outdoor dining.
Discussion Questions
DISCUSSION QUESTIONS: Do you see Sweetgreen’s Sweetpass program more as a means to build connections with existing customers or as a draw to attract new patrons? Do subscription programs represent a significant opportunity for restaurants?
Poll
Loading …BrainTrust
Melissa Minkow
Director, Retail Strategy, CI&T
Gene Detroyer
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
I can’t see this driving much trial at all since you have to be mentally committed to multiple orders for this to actually be a deal. Even for someone like me, who loves Sweetgreen, this just doesn’t seem like that much of an incentive. I have a hard time believing that anyone envisions making this many salad orders in close proximity. Loyalty approaches must be tailored not only to the consumer, but to the product. Sweetgreen doesn’t offer the kind of product, nor price point, suited to a program like this.
This program is too complicated and comes with too many strings to be effective. It requires minimum purchase and expires within 30 days. It has limited appeal even for existing customers. It may help retention, but I don’t believe it is an effective program to pull new customers in.
The principles of simple and effective loyalty programs apply to any type of recurring subscription:
I just read the terms and they seem to suggest that you can’t use a delivery service and can’t order in the store. So that’s got to cut down the number of people who would want this. Yes, if you’re buying pricey salads more than once a week from here and you’re happy ordering on their app or online, this makes sense. This is a frequent user reward, not a penetration builder. My advice – go to the grocery store for half the price.
Is it just a coincidence that the discount they offer is about the same as what the delivery services rip them off for?
In our area several restaurants have started to drop the delivery companies. One even charges if you want delivery from DoorDash, et. al. (I don’t know if they can do it, but they do.)