The subscription model is taking hold in the restaurant industry. Following on the heels of coffeehouse chains’ coffee subscriptions, Olive Garden’s 2018 Never Ending Pasta Pass, and Taco Bell’s Taco Lover’s Pass, fast casual chain sweetgreen announced Monday (Jan. 3) the launch of its own subscription pilot, sweetpass.
Unlike other brands’ programs, which typically offer free items each day, sweetgreen’s offers a daily discount instead, offering one $3 credit per purchase per day for a monthly $10 payment. The pass is available for purchase through mid-January and is valid for 30 days, such that the test of the program ends in mid-February.
The news comes six weeks after the brand’s initial public offering (IPO) in November, which beat pricing estimates, bringing in hundreds of millions of dollars. Share prices have dipped significantly since then, and a subscription program of this kind could present an opportunity for the brand to boost frequency with its semi-frequent customers, converting them into superfans and building habits that last beyond the duration of their subscription.
Still, this investment in building loyalty is a surprising move from a brand that axed its rewards program, to focus “on more targeted promotions” in a move to save on cost amid mounting losses. Perhaps, if the pilot is successful and the program comes back on a more permanent basis, the program will take the place of the traditional loyalty program, with sweetgreen benefitting from the guaranteed revenue of the monthly payment.
Related news: Gearing up to Go Public, Sweetgreen’s Aggressive Digital Efforts May Be Misdirected
Moreover, if the program sees that success, other restaurant brands may take note. Already, subscriptions are gaining traction, and the concept of a subscription program that rewards additional purchases rather than simply gives away items may be an attractive one to restaurants interested in driving visit frequency but concerned about costs.
Certainly, existing subscription programs have not been across-the-board hits. In late December, news broke that United Kingdom sandwich and coffee chain Pret a Manger is facing widespread customer backlash after failing to accommodate subscribers’ asks for menu items supposedly covered by the program.
Read more: UK Sandwich Chain’s Subscription Offer Falls Short, Draws Ire
In an interview with PYMNTS concerning the Taco Lover’s Pass, Zipporah Allen, chief digital officer at Taco Bell, said the brand is “thrilled with the positive reception the Taco Lover’s Pass has received” but declined to disclose quantitative details about the program’s performance so far.
See also: Taco Bell Serves Up a Subscription Service to Keep Customers Loyal
Still, overall, subscriptions are on the rise. PYMNTS’ Subscription Commerce Tracker, created in collaboration with software-as-a-service (SaaS) subscription-billing and revenue recovery platform Vindicia, found that, per a survey of a census-balanced panel of 2,025 U.S. consumers featured in the June edition, 34% of subscribers reported subscribing to more services at the time of the survey than they had subscribed to just three months prior, and the average subscriber holds 3.4 subscriptions at any given time.
“There isn’t a company that we talk to today that isn’t thinking about in some way offering a recurring model for products that traditionally had not been purchased that way,” Trace Galloway, chief strategy officer at Vindicia, told PYMNTS in an interview. “A good loyalty or membership or club concept will build brand affinity and loyalty in a way that, long term, will serve those businesses very well.”
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