jamie goode's wine blog: Stormhoek's Threshers discount goes big

Friday, December 01, 2006

Stormhoek's Threshers discount goes big

The BBC News site has picked up on the Threshers (UK off licence chain) 40% off deal - a piece of viral marketing originated by Web 2.0 dudes Stormhoek. The downloadable pdf coupon seems to have spread like crazy.

The beauty of this bit of marketing is that everyone benefits, and it isn't as mad an offer on Threshers part as it seems: they have a 3 bottles for 2 across almost their entire range, which works out as a 33% discount. Punters with the piece of paper effectively get another 7% off. So they won't be losing money on the deal. [The wines are priced such that they are good but not exceptional value at the 3 for 2 price.] Everyone seems to be selling wine cheap these days. The UK's two largest supermarkets are currently offering 25% discounts on multiple purchases.

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At 5:54 PM, Anonymous Doug said...

Are supermarkets and off-licenses desperate or what? In the independent wine trade, the gross profit on wine ranges between 27-35%. Break-even point normally requires about 19-21% margin. The supermarkets and offies must then, by definition, be selling almost at, or below cost.

But are they? The 3 for 2 and BOGOF promotions are simply a scam. You can postulate any old recommended retail price and then pretend you're discounting heavily off it. Moreover, many of the wines on promotions are major brands; perhaps it is they who are subsidising the promotion with their vast unholy marketing budgets including retrospective discounts and free stock. The whole thing is a complete sham and the quality of wine is usually shockingly mediocre.

Unfortunately, stories like these give a false perception about the value of wine.

At 10:58 PM, Blogger Robert McIntosh said...

This is the point of viral marketing though. If the company makes out they WANT you to forward it, nobody bothers. It is when you think you are doing something subversive that messages spread like wildfire.

They have to appear to not want you to keep sending it along.

As you say, it was obvious to informed observers from the start that 40% off was never as good an offer as it seems. The prices of single bottles are already higher than average so that the 3 for 2 is a good, but not great, deal, so this is not a much better deal.

I would not blame any "unholy" marketing budgets (what are they anyway?) for this, but rather congratulate Thresher not only for having created this illusion, but having been able to keep up the facade for so long.

What I would caution against though is believing that this is a blogging / Web 2.0 phenomenon (as Hugh Macleod seems to be suggesting). Essentially it is the same as any previous such emails (star wars kid, randy lawyers, elligible Turkish bachelors) or any playground gossip, just easier to turn into a commercial profit.

Whatever happens, Thresher have us talking about them, which is good for their brand.

Whatever happens, Thresher have us talking about wine prices (again), rather than quality, which is arguably bad for wine.

At 9:22 PM, Blogger Jamie said...

Doug and Robert - thanks for your thoughtful and insightful comments.

At 1:42 PM, Anonymous Andrew said...

A good site for discount codes, bargins and offers, try discounthypermarket.com. Hundreds of codes updated weekly for all the major online stores. Some great offers for Mothers Day!


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