As fall quickly approaches, many consumers are looking forward to cooler weather and a change in routine, but also to the return of their favorite seasonal beverages, such as pumpkin coffees and lattes and white mochas. New data from global market research firm The NPD Group shows that such seasonal beverage limited-time offers can have a positive impact on chain operators’ business.
“Do you have a seasonal beverage program?” asks Bonnie Riggs, analyst at NPD. “You should.”
While limited-time offers tend to be one-offs — customers buy one and then they’re done — seasonal beverage offers can inspire additional visits from existing customers, lure in new customers, attract customers from competitors and stimulate new business during slow periods, according to the latest research from NPD’s new Checkout Tracking. Checkout Tracking harvests receipts from more than 35,000 diners to track consumer purchase behavior.
Looking at the purchase cycle of a pumpkin latte limited-time offer offered at a major chain last fall, NPD found that buyers tended to view the purchase as “indulgent,” and the vast majority — about 72 percent — purchased the item just once. About 20 percent of customers purchased the item twice, and about 8 percent made three or more purchases during the offer period.
To determine the impact of limited-time offers on visit frequency, NPD examined the purchase cycle of a seasonal shake offer at another major chain. The data revealed that these shake purchasers tended to be the restaurant’s most loyal customers, with higher purchase frequency rates, especially during the promotional period. According to the data, shake buyers made 5.7 visits in the two-month period before the limited-time offer, and then made an additional visit during the limited-time offer period. Meanwhile non-shake buyers made only 4.7 visits prior to the promotion and 4.4 visits during the limited-time offer.
“These seasonal beverages have a positive impact on visit frequency,” Riggs said. “If you can increase visit frequency by one full visit, that’s a lot of volume.”
In addition to increasing visits and visit frequency, seasonal beverages also produce higher checks, NPD found. During fall and winter 2014, the average check for pumpkin latte buyers was $7.81, compared with $6.67 for non-buyers. Similarly, the average check for buyers of a white mocha, another popular seasonal beverage, was $8.37, compared with just $6.84 for non-buyers. Consumers’ purchase of food items in addition to the beverage contributed to the higher check average, according to NPD’s study.
Short and sweet
Offering seasonal beverages for a limited time can yield sweet success for chains, but not all limited-time offers are winners. Below, Dunkin' Donuts and Smoothie King share some tactics for introducing winning new product offers.
Dunkin' Donuts is one of the industry’s most prolific in terms of introducing new products and limited-time offers. The strategy has proven highly successful for the brand.
“We’ve executed a limited-time offer strategy for the last five years, so that we’re regularly bringing in new products,” said Chris Fuqua, Dunkin' Donuts vice president of marketing. “We think [our limited-time offers] do both — drive traffic and sales.”
The coffee-and-doughnut chain’s seasonal pumpkin beverages, first launched in 2012, have a loyal customer following. Today, the chain offers a wide selection of pumpkin beverages, including pumpkin coffee, pumpkin lattes and pumpkin mochas, as well as a variety of pumpkin-flavored foods. Dunkin' Donuts kicked off the return of its fall pumpkin lineup in mid-August with its Pumpkin Peeks celebration, offering pumpkin giveaways at select restaurants. Pumpkin coffee remains the chain’s best-selling pumpkin beverage, continuing to grow year over year.
While many factors contribute to the success of a Dunkin' Donuts limited-time offer, Fuqua stresses the importance of an ongoing strategy.
“A limited-time offer strategy is really important, not just one time a year,” Fuqua said. “When their favorite limited-time offer goes away, our responsibility is to deliver something [else] to consumers they’ll be interested in.”
Bringing pumpkin back
Last fall was the first time that Covington, La.-based Smoothie King launched a Pumpkin Spice Smoothie limited-time offer systemwide. The product was so successful that the chain is bringing it back this fall, and prepares to follow it up with a line of Dark Chocolate Smoothies for the holidays.
“We saw that seasonally relevant flavor options do drive traffic and sales,” said Katherine LeBlanc, Smoothie King marketing and communications manager. “Having something in a limited time creates a sense of urgency… Our peak season is spring–summer. Fall is a window of opportunity for us.”
While pumpkin limited-time offers had been offered at some locations in the past, they were not consistent. When Smoothie King realized the power of pumpkin, the brand decided to tweak the product and offer it systemwide. The result is the better-for-you Pumpkin Spice Smoothie, made with Chobani Greek yogurt or frozen yogurt and “herbal immune enhancer.” As a result, Smoothie King saw an increase of 12 guests per unit per day during the October 2014 launch of the product, lifting the product to No. 8 on the chain’s menu mix of top 10 items. The Pumpkin Spice Smoothies limited-time offer returns on Aug. 31, followed by the mid-November launch of Dark Chocolate Smoothies in strawberry, mint and spice flavors.
“Limited-time offers are going to be a way for us to deliver that newness in a way that doesn’t make us stray from our core menu items,” LeBlanc said.