US Markets
Friday, January 5th, 2024 4:52 pm EDT
Key Points
- Blank Street Coffee’s Expansion and Valuation: Blank Street Coffee, a rising coffee chain with 74 locations across major cities, including New York City, London, Boston, and Washington, has made a significant impact with its affordable pricing strategy. Since its launch three and a half years ago, the startup has grown rapidly, attracting approximately $100 million in funding from notable investors such as General Catalyst, Tiger Global, and a co-founder of Warby Parker. However, its valuation dipped from $218 million to $177 million within a year as the Federal Reserve raised interest rates and economic concerns grew.
- Subscription Model for Customer Loyalty: As part of its strategy to further engage customers and ensure steady revenue, Blank Street Coffee introduced the “Blank Street Regulars” subscription program. This program, launched in the summer, has already attracted around 5,000 paying members, with an additional 4,000 on the waiting list. Members, termed “Regulars,” can choose between two subscription plans, costing $8.99 or $17.99 per week. These plans offer savings on various drinks, including basic options and more expansive choices. To prevent misuse and potential financial strain, Blank Street caps the number of drinks per week at 14 and enforces a two-hour wait between purchases.
- Balancing Growth and Customer Experience: While Blank Street Coffee’s rapid expansion and venture funding have led to skepticism among some coffee drinkers, the startup’s emphasis on affordability, with prices below competitors like Dunkin’ and Starbucks, has proven attractive. The subscription program is designed to cater to a specific segment of customers seeking consistent cost savings. To balance demand and avoid overwhelming its stores and baristas, Blank Street has capped the number of Regulars for now. The company is also working to enhance capacity by installing additional espresso machines. Furthermore, it recently expanded the Regulars program to London, facing competition from Pret A Manger’s coffee subscription but confident in winning over customers who prioritize quality coffee. The company is considering future program expansions, including family and group plans, leveraging the flexibility of a program designed in response to current customer preferences rather than adhering to traditional loyalty models.
Blank Street Coffee, an emerging coffee chain with 74 locations across New York City, London, Boston, and Washington, is aiming to boost customer loyalty through its subscription program, Blank Street Regulars. Launched this summer, the program has already attracted around 5,000 paying members, with an additional 4,000 on the waiting list. For $8.99 or $17.99 per week, members can enjoy various drinks, including basic teas, hot brewed coffee, Americanos, and double espressos. To prevent misuse and avoid financial pitfalls, Blank Street caps the weekly drinks at 14, with a minimum two-hour wait between purchases. The subscription approach aligns with a trend among startups and established companies seeking guaranteed revenue and enhanced customer engagement. Blank Street, with approximately $100 million in funding, faces competition in London, where it recently introduced Regulars, from established chains like Pret A Manger. The company’s flexible approach allows for potential expansion, including family and group plans. Despite its critics, Blank Street’s focus on affordability has contributed to its popularity amid rising coffee prices.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/01/05/blank-street-coffee-bets-on-subscription-program.html
