If anyone compiles a top ten list of internet cock-ups for 2006,
Threshers' discount voucher will surely rank high. But it could
also top the list of all-time viral marketing triumphs.
When I first received the voucher, promising 40 per cent off all
wine and Champagne at any of the alcohol retailers’ branches, I was
cynical enough to run a Google search for "Threshers discount
hoax". It was not a hoax, though the official line from Threshers
HQ seemed to be that it was a gaffe: the company said it neither
intended nor anticipated the reaction.
The offer was intended as a "thank you" to suppliers, it said.
Threshers invited them to pass on the voucher to "friends and
family", but the voucher was posted to a blog run by Stormhoek, a
South African supplier, as a free download and spread like wildfire
by email. Media coverage increased the momentum.
At least Threshers wasn’t offering to give the booze away. That
distinguished it from another of the year's internet blunders, when
Starbucks emailed a free drink voucher to staff in the
south-eastern US with instructions to forward it to family and
friends. The company refused to accommodate the inevitable
stampede. A class action lawsuit followed, claiming $114
million.
If Threshers risked losing significant sums of cash it could
refuse to serve customers. That would upset shoppers and do the
company's reputation no favours. But there would be no risk of
million-dollar lawsuits. Customers might have grounds to sue, since
each voucher is, in a legal sense, more like an offer than an
invitation to treat. But the conditions limit sales to £500 and
class action lawsuits are alien to UK courts. Suing would be a
waste of money.
Instead, Threshers' reaction was sensible: it quickly admitted a
mistake and it promised to honour the vouchers.
The 40 per cent discount is generous, but this is a shop that
has long promoted a three-for-two offer on all wine and Champagne
(and the voucher won't work in conjunction with that offer or any
other discount). That basically means a 33 per cent discount has
become a 40 per cent discount.
I have no idea what mark-up Threshers applies, which makes it
impossible to measure the damage of that extra 7 per cent, but an
unscientific price comparison suggests its standard prices are
high: a bottle of Veuve Clicquot Non-Vintage Champagne is £35.99 in
my local branch. Across the road, rival Oddbins sells the same
bottle for £27.99, while Sainsbury’s has it for £25.64. With the
voucher, Threshers is selling it for £21.60.
A spokesman for Threshers has said that the company expects its
margins to take a hit but it does not expect to make a loss. A
lower margin is compensated by higher sales and Threshers' sales
are surely going through the roof. Countless voucher-holders will
stock up for the festive season before the offer expires on
December 10 and presumably some will buy non-discounted beer and
spirits at the same time. First-time visitors may change
allegiances. It all sounds like a marketing success story without a
marketing budget.
I don’t think this was a cunning plan: Threshers' own website
was crushed by the stampede and it stayed down for several days,
leaving many voucher holders unable to locate their nearest branch.
Also, the voucher requests visitors' names and email addresses but
forgets to say that, in using the voucher, they consent to
marketing by email.
The sales assistant at my local branch told me she was run off
her feet and she blamed the offer, not the time of year. As I
handed over my voucher to buy a bargain bottle of Stormhoek, she
showed me a two-inch stack of vouchers already received. She didn't
know the shop's profit margin, but reckoned the promotion was
likely down to "either a genius or an idiot at head office". If
there is any profit margin at all, I'd put it down to an act of
accidental genius.
By Struan Robertson, Editor of OUT-LAW. This opinion piece
first appeared in Struan's regular column for Times
Online.
