Multi-person subscriptions: to serve your commuter customers
Although the UK is not among the biggest coffee consuming nations, it has the largest branded coffee shop market in Europe . The sector’s strength can be attributed to Britain’s coffee consumption habits: a whopping 32% of all coffee sales account for coffees bought outside the home in cafés, shops, pubs and restaurants . Britain provides a good demonstration of how important commuter customers are to cafés, and how cafés can best serve this demographic.
Location is among the ten most important factors in UK café success and commuter footfall is integral to café sustainability, as the COVID pandemic proved. At the peak of the outbreak, £1billion of takeaway coffee sales was wiped from the market in the three months from April to July 2020 as commuters stayed at home .
Happily, with the decline of stay-at-home orders in 2021, UK branded coffee shops bounced back better than projected and a £1.3billion sales rebound restored the market to worth 87% of its pre-pandemic value . Office workers and commuters were a vital aspect of the coffee market’s recovery, with visits from colleagues together accounting for c.5% of social visits to cafés .
Why cafés should adopt multi-person subscriptions
Commuter customers are already a valuable demographic for city centre cafés, coffee shops and hospitality businesses. Adopting a multi-person subscription model helps cafés harness the purchasing power of this pre-existing demographic.
A multi-person subscription provides businesses with a set number of free beverages per registered teammate per day, as well as exclusive access to offers and discounts for their team, for a monthly recurring fee. Coffee shops have total flexibility to customise what benefits come with multi-person subscriptions, choose their own pricing tiers and decide on cost per each additional registered teammate in the backend of the 5Loyalty app.
Businesses benefit from offering a non-financial culture benefit that supports staff retention. Meanwhile, cafés benefit from stable monthly recurring revenue and increased opportunities to cross- and up-sell products.
Coffee shops that have already harnessed 5Loyalty to launch single-person subscription services have so far seen successful growth month-by-month and an increase in other product sales concurrently. 92° benefits from £23,000 in additional revenue month-by-month and has a stable 60% subscription renewal rate, with an increase in food and cake sales occurring alongside the subscription service’s rise .
Considering the importance that commuter customers have to coffee shops’ success, targeting them with multi-person subscription services is a savvy method to extract more value from a pre-existing demographic.
Increase exposure to a key demographic
Many coffee shops, such as 5Loyalty partner Pure, focus on predominantly serving commuter customers. Adam Williams, E-commerce Director at Pure, describes commuter customers as “Our key customers in the majority of our stores. They are who we are here to serve.” Pure, which has 18 coffee shops in London and opens new locations based on their proximity to office workers and commuters: “We’re set up to serve office workers and commuters, and it’s in those locations that our stores are located.”
The Pure store that best exemplifies this is the Pure in Hammersmith Station. This site benefits from significant footfall from commuters in the morning and a proximity to office workers at lunch. The station serves Hammersmith and Fulham borough, which is one of west London’s most important business communities. Established multinationals including GE, Disney and L’Oreal call the borough home, as do a new wave of innovative start-ups . Employees in Hammersmith typically have more disposable income than the average: only 12.4% of Hammersmith residents are in low paid work, which is significantly lower than the London average of 20.2% .
Hammersmith Station Pure already serves predominantly commuters and office workers with disposable incomes. A multi-person subscription service could benefit a café like this Pure through successfully enticing customers away from competitors to claim their coffee subscription, and who will likely purchase other products upon visits. Cafés benefit additionally from a relatively stable monthly recurring revenue.
Commuter consumers are integral to the success of the UK’s cafés and hospitality businesses. Launching a multi-person subscription supports cafés to increase their target demographic’s value by acquiring clients from competitors and harnessing more opportunities to cross- and up-sell.
Businesses that choose to use a multi-person subscription benefit from providing a non-financial perk that supports retention. The prior success of 5Loyalty partnered coffee shops’ single-person subscriptions demonstrate the strong potential that multi-person subscriptions have to secure recurring revenue and powering growth.