A highly fortunate *cough* mistake
If you’re in the UK, you’ve doubtless been forwarded an email coupon to receive 40% off wine and champagne at the country’s largest off-license chain, Threshers.
If you’re like most of this site’s contributors, you’ve doubtless headed straight down to the nearest offy, loaded up on all the plonk you can carry, and are currently trying to read this article with one eye open and severely impaired comprehension.
The official back-story to the Threshers offer is an excellent narrative of corporate foolishness, plucky consumers, and a decent company restoring people’s faith in big business by taking responsibility and an enormous cash hit by honouring its promises. It’s a compelling story, and it’s received a hell of a lot of coverage.
The official line is summed up by this BBC article:
The 40%-off wine and champagne voucher was intended for suppliers and their friends, but has been distributed widely via blogs, email and chatrooms… The company admits it is slightly concerned about the popularity of the offer.
Haha! Silly company doesn’t understand online marketing, sends out unprotected and insecure voucher to a few close associates, and then gets into trouble when it all goes viral. Like a corporate Claire Swire, Threshers has been royally rogered by the power of the Internet.
The only problem with this story is that it’s almost certainly rubbish.
Threshers is the market leader in UK specialist (ie non-supermarket) alcohol retail. It is owned by one of Europe’s more successful private equity firms, has annual sales of nearly a billion quid, and has managed to grow revenues and profits despite the horrible state of the UK alcohol retail market. One of the ways in which it has achieved this is by offering a permanent 3-for-2 promotion on wine.
This is a great marketing move in its own right. Since nobody in the UK understands anything about wine, we judge quality by price. Therefore, in Threshers we pick a £6 wine (or a £3 wine if we’re a student) and assume it will have about £6 worth of wine-ness to it. But then we notice that for only £12 we can get £18 worth of wine-ness, which is a far better deal, so we buy three bottles.
We intend to save two of these for the next parties we go to, but instead we drink them because they’re there, and have to go to Threshers again next time we need a bottle of wine. So Threshers has doubled our spending – and of course, the wine was only worth £4 a bottle in the first place…
Guess what isn’t valid in combination with the 40%-off voucher? Yup, it’s the 3-for-2 deal, so the real discount being offered compared to actual selling price is 10%. With this 10%, Threshers has bought 150 articles worth of publicity, and probably more than a million new customers.
It would be terribly cynical of me to speculate that this is not only a deliberate viral marketing campaign, but one of the most successful ever…
Now I feel so relieved that I didn’t “fall” for it. The smug feeling coursing through my veins is almost like the effect of alcohol itself.
I saw the coupon and thought someone is having a laugh, then heard on the radio that they were being honoured, but that also, the mark up is so that in a comparison, details a little sketchy I’m afraid, even with the coupon most prices were the same as in tescos’ etc.
Very clever.
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It’s worth adding that the 40 per cent discount only puts Threshers on a par with Tesco.
The off license has fallen into the trap of adopting a high-low pricing strategy. This means raising prices across the board, but then offering lots of promotions.
Safeway did the same and it’s what killed them in the end. When the big promotions were unveiled, sales went up. But when customers got to the til they discovered the total basket price was at least the same, often more than they were used to. So they learnt to use Safeway only for promotions. That proved expensive, so Safeway initially cut back on the promotions only to see customers walk away. Soon Safeway couldn’t sell anything without putting it on promotion and headline prices went 15-20% above Tesco.
Threshers has a permanent 3 for 2 offer. This make be more successful as people may like to feel they’re buying more expensive wine than they can afford.
When Threshers originally started the 3 for 2 offer, it was noted in the trade press that a few weeks prior all of their stock increased by 30%. Also around this time, they sacked their Managers but offered them the franchise rights to the store they had been working in.
They haven’t lost a penny on this, for sure.
Notice also the “minimum of £500 spend in one transaction” flaw…
Do Threshers sell wine? Is that what they call it?
“Since nobody in the UK understands anything about wine, we judge quality by price.”
Bit of a generalisation I think.
I understand wine. It’s been my job at various points to understand British people’s attitude to wine. Up to about the 90th percentile (of wine knowledge, before I get shot down for class-ism), they don’t.
Relax John. I was just picking you up on that particular point! I agree with the broad gist of your article and how everyone has been conned by this offer. I too received the email but was highly suspicious that it was a “great offer”.
What’s odd about Threshers pricing is that their premium bottled beers (real ales) are very competitively priced, unlike the wine.
Given that I don’t “understand” wine, can somebody explain to me the best way to obtain a balance of price/quality in wine – supermarkets, wine clubs, off licences? Or should one forget the whole idea, and just rely on chance? I don’t have time to really learn about wine, and I find the information one gets through newspaper columns to be too much to remember. I need some sort of handy reckoner…
Also note that one of the vouchers fell into the hands of marketing blogger/blogging marketeer Hugh MacLeod, a connection which has been picked up (embarrassingly for us) by a blogger in Missouri. That was careless of Thresher’s, wasn’t it?
A con? Not in the slightest – a good and extremely cheap (for Threshers) marketing technique. How much do you think they spent on shoving Gordon in each window in comparison to the voucher?
The deal is good – 7% above their normal 3 for 2 discount – you just have to do your research in picking the best wines, like any purchase for anything, and you are not forced into buying 3 bottles either.
Tesco is not always cheaper and also engages in some dubious deals and offers (ie half price offers on a wine originally listed at £7.99 when it is actually only worth £3.99 to start with)
I found the whole exercise thrilling and engaging – whether Hugh was party to any ‘deception’ or not; it spread like wild fire. Visitors to my site have absolutely rocketed once i posted the details. (The first to do so after Hugh I believe).
(Bondwoman – dont have time to learn about wine? Read a few wine blogs….learn by what you taste and enjoy)
Dear Sir / Madam,
Instead of just reporting about the Thresher’s vouchers why doidn’t you publish one for the rest of us to print & spend?
Regards
Alex.
The inside story is that this is a carefully considered and costed campaign that is doing wonders for Threshers market share and profitability. It is founded on fostering the erroneous belief that punters are profiting from a careless mistake that the retailer is decent enough to honour. VERY clever marketing that fleeces the very suckers who think that they’re putting one over Threshers – hilarious!