While our coffee machine reviews are the main focus of our website, we want to use the blog section to explore some other coffee related areas, without taking too much focus away from the main topic. It seems that our new blog is the perfect place to do that, and today we’re going to start to look at the types of product that regularly pop up as an add on when people invest in a coffee machine.
Typically, the three most common added extras when a coffee machine is purchased are coffee beans, jugs and thermometers. You will often see something like this when you’re shopping online – whether you use our recommendation of shopping with Amazon or go elsewhere.
Now, you could be forgiven for thinking that I’m actually mistaken, and the reason I often see the steel jugs and frothing thermometers sell well with coffee machines is specifically because Amazon sell these bundles, but it’s actually the other way around. Amazon are probably the most informed retailer on the planet when it comes to what sells well together, and they know what a gold mine that can be. Let’s consider the past for a second, and what traditional supermarkets have been doing for years.
Tesco have operated their Clubcard since 1994 when a trial version was launched, with the full scheme launching at the beginning of 1995. Rewarding customers for loyalty was hardly a new phenomenon, even Tesco themselves had previously handed out Green Shield stamps as an incentive to bring customers back to their stores time and again. Where clubcard revolutionised sales and marketing for the supermarket giant was it gave them the ability to track sales en masse to individual customers. The cost of the rewards given to the customers must logically be a cost worth bearing, so therefore the value of the data collected most be higher. Big companies tend not to be too specific about the data they collect and exactly how they use it, but it’s highly likely that the benefit to Tesco has two main advantages.
- The first advantage is the aggregate data that gets collected – that is the overall sales data. This will be able to map out trends, so for example, if a product is reduced, what impact does it have on buying patterns? Do people who do not usually put it into their trolley start to do so, and what percentage of shoppers? With people who already regularly buy that brand, do they buy more? This information is of huge value, as it helps to understand how pricing and promotions affect behaviour, and what stock levels are required to exploit the resulting effect.
- The second attraction for the supermarket is being able to market directly to customers tailored to their shopping habits. For example, if a customer stops frequenting Tesco, they have intelligence on what might be likely to tempt them back. Similarly on an individual level, it’s possible to tempt customers towards similar but more profitable products by offering vouchers and other promotional materials.
If this works in a real life bricks and mortar store, you can bet it works for online retailers too, and that’s one of the reasons you see multi-buys like the three products above on Amazon’s website. Naturally, selling a couple of add-ons is going to increase the profitability for Amazon themselves, but also help the customer identify what extras they might like to consider, based on previous customer purchases.
In general, Amazon’s success has been down to a focus on giving the customer what they need, which is a higher benchmark than giving them what they want. To clarify, a customer buying a coffee machine may not realise that they can also benefit from a jug and thermometer to use with their machine, so they don’t know they want it – Amazon know that they need to be informed in order to make an educated decision. That’s not to say every customer should choose all three items, they should simply be given the choice.
In the next couple of updates to the blog, we’re going to be looking in more detail at these related purchases, coffee beans, jugs and thermometers. We’ll share what sells well when people buy their coffee machines, as we hope that will be useful in making your own decisions. Of course, we’re not necessarily saying you need to buy them too, just giving you a little more help in understanding what you might need.