Pret Bets on Subscriptions

The word “unprecedented” has been voted as one of the most unpopular words of 2020.

As Covid-challenged consumers struggle to make sense of the dramatic changes in lifestyle that affect us globally, but there’s no doubt that the hospitality sector is one of the worst affected and the damage is “unprecedented”.

With a challenging road ahead before profits can be expected, it seems that some businesses may never recover to their pre-Covid levels, with companies like BP suggesting that demand for crude oil may actually have peaked in 2019, never to recover.

It’s also unclear which brands will end up being the worst affected by the fallout from such dramatic changes in purchase patterns, so retailers like Pret a Manger in the UK are simultaneously laying off staff, while re-inventing their businesses to address the now familiar idea of the “new normal”, with the introduction of a subscription programme called YourPret Barista.

We’ve actually been writing about the power of subscription models to drive loyalty for US brands such as Burger King, Cumberland Farms and Panera Bread since early 2019, but the model has only now been recognised for its potential in the UK. The YourPret Barista programme boasts a compelling £20 proposition and claims to be the first in the UK market.

The YourPret Barista Programme Includes most drink options on the Pret A Manger Menu

So How Does it Work:

1. Customers simply sign up online with their credit card details and to accept the subscription offer.
2. They receive a receipt and then a voucher via email which contains a QR code.
3. That QR code is valid for one month from the date it’s received.
4. Customers download the code to their mobile wallet and it’s ready to use in any one of the 366 participating stores in the UK (all except one!).
5. Customers order from an extensive list including organic Pret coffees, teas, hot chocolates, iced coffees, cold brew, frappes and blended smoothies, including any milk alternatives, syrups and extra shots.
6. They scan their QR code at the till to claim the purchase.
7. Drinks can be claimed up to 5 times a day (with a limit of one redemption allowed every 30 minutes to prevent subscribers sharing with friends).

Watch this short video to see the launch proposition described:

YourPret by Pret A Manager UK – launched September 2020

Insights

With this concept just launched, and UK city centres still deserted, it’s clear that loyalty programmes are more important than ever and retailers compete for their share of the trickle of customers that have returned to work in their offices.

Pret’s pricing is incredibly competitive with the £20 fee and month’s free introductory trial was described by consumer expert Kate Hardcastle as an “impressively low-ball offer…. illustrating how desperate retailers are to win people back and build loyalty”. In Pret stores, a barista-crafted latte typically costs about £2.40, so the package makes sense for anyone expecting to enjoy more than two espresso-based drinks a week – just a fraction of many people’s previous daily consumption.

Like the US concepts that precede it, it seems that Pret is betting that allowing customers develop new habits around coffee will result in it becoming part of their daily routine, perhaps driving some profitable purchases such as sandwiches and “heat at home” meals as part of their new behaviour.

Like Pret, we’re betting that subscriptions offer a powerful model with recurring revenue and “extreme loyalty” needed in these unprecedented times!