Online sales grew by more than 30% in the fourth quarter, but store sales slid by 6.1% year over year.
After generating a huge response with Groupon deals, the store began its own newsletter.
Inspired by huge consumer responses to coupons offered through Groupon Inc.’s daily-deal service, Chicago’s NYC Bagel Deli restaurant chain has begun its own e-mail marketing program, says owner Corey Kaplan. Complementary to its own Groupon deals—which Kaplan says he now runs daily after 10,500 customers purchased NYC Bagel Deli’s first Groupon, $4 for $10 worth of food, in 2010—the restaurant’s own e-mail coupons are less frequent but more deeply discounted and exclusive, he says.
“Instead of getting inundated with e-mails, I make it worth the recipient’s time when I do send one,” he says. “And I don’t care if you pass them around; I want people to come in.”
For example, in the height of Chicago’s winter, NYC Bagel Deli offered only to its e-mail list subscribers the option to pay “the degrees outside” for a hot soup—if it was 13 degrees, they paid $0.13 for a normally $5 soup, Kaplan says. Other e-mail-only deals he’s sent include a buy-one-get-one-free deal on either pizzas or a half-dozen bagels and 50% off an order of at least $10, he says. Typically, 1.5% to 2% of the 4,800 customers on the restaurant’s e-mail list redeem the offers, he says.
Kaplan pays $30 per month to send e-mails on vendor Constant Contact’s platform, which he considers a negligible price compared to the returns he gets.
NYC Bagel Deli also allows customers to place orders online through its web site so that their food is ready and paid for when they arrive at a store, Kaplan says. About 5% to 10% of orders in the restaurants come from the web, he says. The business is also active on social media, including Facebook, Pinterest, Instagram, Twitter and “any way we can get to our core market,” he says.
“When I started this business in 2000, no one used e-mail or online ordering—everyone was still dialing 411 for information,” he says. In contrast, nowadays the web is a must-have, even for small local restaurants like his, in order to effectively reach customers, he says. Even basic web site features, such as posting a menu or showing directions to stores, make a difference, Kaplan says. “It’s extremely tough out there,” he says. “You need the edge.”