It was a very low day when I lashed out at the contrivance of limited-time offers. My target was a burger of some kind and the restaurant was Applebee’s. It wasn’t just any Applebee’s. It was an airport Applebee’s, during a delayed layover as I traveled between business conventions for work.
(I remember thinking something particularly dark about how sad it would be if my last meal was eaten at an airport Applebee’s bar.)
My snap was mainly internal, as I swung my glare between the waiter’s flair pins, a damp menu, and a crusty table tent. He was trying to push some awful mess of a sandwich and “…wouldn’t I like to try it before it’s gone.”
The manufactured urgency of limited-time offers isn’t enough to move consumers to action. Otherwise, every seasonal promotion would be a McRib or Black Friday Sale.
Understanding the difference starts with understanding how the Pumpkin Spice Latte has been pushed past the point of no return.
The Notorious PSL
The Pumpkin Spice Latte, #PSL, reigns as the epitome of limited-time offers. The McRib is technically older (brilliantly promoted since 1982) yet, has never become a status symbol. The drink’s impact is obvious, with some even calling it Pumpkin Spice Derangement Syndrome. This is why everyone has been trying to cash in for the flavor for years with Pumpkin Spice products such as,
- Protein Powder
- Country Crock Spread
- Greenies Dog Treats
- CLIF bars
- Kellogg’s Frosted Flakes
- Auntie Anne’s Soft Pretzels
- Noosa Yoghurt
People Magazine, of all publications, has a comprehensive list of Pumpkin Spice products. (Maybe that’s actually not that surprising. Isn’t Blake Shelton kind of the Pumpkin Spice Latte of “sexy” men?”)
The saturation shows how many brands hope to ride those popular coattails of established consumer behavior. Micheline Maynard writes in Forbes, “More information on pumpkin’s popularity comes from Grubhub, the restaurant delivery app, which found that orders for pumpkin lattes are 300% higher in the fall than the rest of the year.”
This year, Dunkin’ Donuts beat Starbucks to the punch by one day. But it doesn’t really matter. If the hyperbolic Rich B*tch, Chanel #1 from Scream Queens couldn’t kill #firstPSL, can anything?
My prediction is that only Starbucks itself can (and probably will.)
Spice Spice Baby
In January 2003, the Starbucks product research team, led by Peter Dukes, tested several seasonal flavors. They experimented on winter with a Peppermint Latte, Eggnog Latte, and a Fall Harvest Latte. At the time, few other foods focused on commoditizing the pumpkin flavor. The Fall Harvest Latte was changed to the Pumpkin Spice Latte and launched in the fall of 2003.
Between its first release and 2015, Starbucks reported passing 200 million sales of the beverage. Reporting on the popularity (and infamy) of the beverage is redundant at this point. It has become iconic, hashtagged-to-death, dissected for chemical components, and anthropomorphized as the incarnation of the basic white girl.
More interestingly, 1010data, an analytics company noted that while pumpkin spice products have risen by nearly 50 percent between 2015 and 2016, sales only rose 21 percent.
“Pumpkin Spice is just Egg Nog for morning people,” says John Oliver.
As Elise Taylor of Vogue explains, “All those wackadoo pumpkin spice products in the grocery store probably aren’t selling—only 10 percent of product categories accounted for 87 percent of pumpkin-flavored sales across the consumer landscape. The biggest sale increases were seen in cereal (up 183 percent that year) and—what else?—liquid coffee (up 596 percent). But other products, like yogurt and craft beer, saw a decline. Not everything pumpkin spice turns to gold.”
We’re clearly past peak Pumpkin Spice to a point of meta self-awareness. According to Business Insider, “Over the last decade, Starbucks has been grappling with how to balance between sweet drinks like the PSL and Frappuccinos and coffee snob-approved beverages like cold brew and espresso-based drinks.”
Just a Stan
Full Disclosure: I stan Shamrock Shakes… which is about as Instagram-friendly as an authentic #nomakeup #nofilter selfie.
Business Insider reports, that the drink has become a ‘marker of fall.’” Indeed, sales of the fall flavor usually spike on the first day, helping brands end the retail year strong. However, the trend was initially seen as a risk. And it’s a risk that the brand is still questioning today.
Past Starbucks guru Tim Kern told Quartz, “A number of us thought it was a beverage so dominated by a flavor other than coffee that it didn’t put Starbucks’ coffee in the best light.” The timing was perfect. Market research had already shown them that the taste would feel nostalgically fresh. No one was advertising that flavor.
Then, the 2008 recession solidified the comfort food trend, according to food analyst Suzy Badaracco. During times of stress, we seek out foods that help us relive happy memories (also seen in the awkward spike of slime-handling and paint stirring videos after the 2016 election).
The rise and fall of the flavor go back to the core marketing principles behind the drink’s initial success.
Limited-Time Offers Require Awareness
What the copycats fail to realize is the near-formulaic application of a textbook marketing campaign strategy generated both the initial and ongoing success of the drink. They started with a brand-authentic concept and masterfully launched it to the masses.
The campaign is built around The Scarcity Principle. The economic theory suggests that a limited amount of a good, combined with a high demand for a good, leads to a rise in status for that good. This allows brands to ask for a higher price. It also explains why people can get so crazy excited about a drink that could technically be created year round. Often, supply and demand can be manipulated because of the natural tension of their converse relationship.
Limited-time offers to create artificial scarcity. In this case, Starbucks says they simply won’t sell the popular beverage at any other time of the year. This creates a lower supply. Since it’s the desired product, the demand increases in proportion to that perceived limited supply.
Is it real? No.
Does it work? Yes… if you do it right.
In Forbes, Debra Donston-Miller explains, “Products that are available only for a limited time have a kind of built-in marketing that can grow in impact over time–think Cadbury Creme Eggs.” She gives the example of the Frosty the Snowman holiday special which declined in seasonal television views once home copies became available. Urgency and exclusivity were core to the appeal.
You can replicate this effect by using the PSL as a model.
Duke started with focus groups and mined their feedback for gems. Unlike the disturbing iterations of both Lays and Oreos in recent years, they didn’t simply bring every idea to market. In fact, the Pumpkin Spice Flavor fell somewhere in the middle in terms of preferences. The brand still had to use discretion when selecting their new limited-time offer.
Construct Authentic Urgency
Then, Starbucks launched the drink at a time that made sense. While technically you can get those spices year round, our minds associate pumpkins with fall. That’s when the plants are supposed to grow and that is when we truly believe we should buy those cans of brown paste.
The burger deal from my introduction was such bull because I can get a burger with weird toppings at any time. There is no season for heartburn. There is no mental association to make me feel like time is truly running out.
(I’m also looking at you IHOB.) Starbucks gave us pumpkin in the fall. Duh.
Retain the Converts
Unlike medium and small businesses, Starbucks could really commit to saturating the market with their promotional ad spend. While their budget dwarfs the average campaign, they also grew a very long tail on their return-on-investment monster.
In general, they worked with their customers, allowing them the freedom to engage on social media as the consumers saw fit. This contrasts with many brands that try to force audiences to follow unnatural hashtags or fan clubs.
A post on Nasdaq explains, “Starbucks’ sponsorship of the Leaf Rakers Society is just the latest move by the company to engage and grow the community of PSL lovers out there, with the goal of whipping them into a frenzy of anticipation.”
Keep the Gold
Furthermore, Starbucks is willing to give their golden goose a rest before they accidentally kill it. They’re obviously testing promotions like the Millennial-bait Unicorn Frappuccinos, and later, Crystal Ball Frappucinos.
In an interview with CNN, Alexander Chernev, a professor of marketing at Northwestern University’s Kellogg School of Management, breaks down their strategy. Essentially, “seasonal menu items mean brands have something new to talk about every quarter” and “Although a specialty item may be exciting on its own, it can also remind consumers how much they like the basics.”
While Starbucks isn’t likely to actually retire the PSL, they’re obviously noodling with replacement menu items. Maybe they can take a cue from the groundbreaking Urban Decay Naked Palette and release new iterations before the original phases out. Then, Starbucks can let the promotion age out gracefully before the brand succumbs to irrelevance by association.
Have You FALLen Behind?
From the end of August until the New Year, retain consumers move into buying mode. It’s Back to School then, Black Friday, and Christmas. If you are going to capture your customer’s loyalty with limited-time offers now is the time. Start by doing your research (and kick your marketers off of the internet and into the streets).
Get a fresh, risky idea.
Work it hard.
Then, keep the limited-time offers rolling until your next promotion.