Chicago — It’s that time a year again for falling leaves, football games, and the annual tradition of limited-time offer (LTO) pumpkin specialty drinks. Turns out that it’s one of the favorite times of the year for foodservice operators who offer the limited time drinks because their business benefits in more ways than one, reports The NPD Group, a leading global information company.
The seasonal beverage offers can spur additional purchases by established customers, bring in new customers, draw customers from competitors, and stimulate business during slow periods, according to research from NPD’s Checkout Tracking™, which harvests receipts from more than 35,000 diners to track consumer purchase behavior. An analysis of the purchase cycle of pumpkin spice latte buyers reveals that these lattes are likely considered to be an “indulgent” purchase, and the vast majority of these purchasers, 72 percent, did so just once. About 20 percent of pumpkin spice latte customers purchased the item twice, and about 8 percent made three or more purchases during the offer period.
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 the Checkout Tracking analysis.
To determine the impact of limited-time offers on visit frequency, NPD also 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. 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.
“Considering the battle for traffic share in the restaurant industry, it’s critical to offer unique, craveable menu items that attract both new customers and keep current ones coming back,” says Bonnie Riggs, NPD restaurant industry analyst. “For the restaurant operator, seasonal beverages have a positive impact on visit frequency and check averages as consumers tend to purchase food along with the seasonal beverage. It doesn’t get much better than that.”
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About The NPD Group
The NPD Group provides global information and advisory services to drive better business decisions. By combining unique data assets with unmatched industry expertise, we help our clients track their markets, understand consumers, and drive profitable growth. Sectors covered include automotive, beauty, consumer electronics, entertainment, fashion, food / foodservice, home, luxury, mobile, office supplies, sports, technology, toys, and video games. For more information, visit www.npd.com and npdgroupblog.com. Follow us on Twitter: @npdgroup.
About Checkout Tracking™
Checkout Tracking, which launched in November 2014, is the first service to provide detailed information on consumer buying behavior, based on receipts for both online and brick-and-mortar retail purchases from the same consumers over time. Checkout Tracking delivers precise category, brand, and item-level purchase detail linked to buyers and their demographics, useful for analyzing competitive market baskets and identifying purchase patterns. Information is collected from more than 50,000 consumers from NPD’s receipt-harvesting mobile phone app and the scanning of more than 2 million active in-boxes for e-receipts through Slice Intelligence.
Source: The NPD Group