April 23, 2015
Starbucks brews up latest limited edition money maker
Adding an air of exclusivity and collector’s appeal to retail items seems to be a burgeoning trend, whether seen in tech retail with the various high-cost versions of the Apple Watch, or in clothing sales with Target’s limited edition Lilly Pulitzer collection and the mad dash it caused among customers and eBay flippers.
Starbucks has been at the game for a while, imbuing an otherwise throwaway product — the gift card — with luxury value and charging a premium price to match. Over the past few years, Starbucks has released a few design-heavy limited edition stainless steel gift cards, which have doubled as keepsakes and cost more than the value that the cards were loaded with. Now Starbucks is upping the ante in terms of design and rolling out a pricey limited edition gift card meant to be the perfect gift for a coffee-drinking mom.
The card, officially known as the Limited-Edition Mother’s Day Premium Starbucks Card, is made of a combination of metal and ceramic materials, features intricate laser-etched floral designs and comes in a floral-decorated gift box. The card costs $200 and comes with $50 loaded on it.
The Mother’s Day card uses the same price structure as Starbucks’ 2014 limited edition stainless steel gift card, which came with a sterling key ring and clasp.
Earlier iterations were pricier, but gave more bang for their buck in terms of how much coffee a recipient could buy. In 2012 and 2013, Starbucks collaborated with luxury retail website Gilt to release $450 stainless steel gift cards with extremely limited runs, each which came loaded with $400 to spend.
Starbucks told USA Today, regarding the 2014 gift card, that the $150 beyond the value loaded on the card constitutes the retail value of the card and keychain. But the product seems to be an attempt to see how much customers, gift-givers or collectors will pay for a tchotchke that offers, dollar-for-dollar, more form than function.
Starbucks’ interest in creating designed-out limited edition promotions has not been limited to gift cards. In 2014 the company released a series of coffee tumblers decorated with Swarovski crystals. The mugs retailed between $50 and $110. Also that year, appealing to a different demographic, they released a set of coffee mugs by modern fashion designer Band of Outsiders.
- Limited-Edition Mother’s Day Premium Starbucks Card – Starbucks.com
- Starbucks Wants You To Spend $200 On A $50 Gift Card For Your Mom – Huffington Post
- Starbucks rolls out $200 ‘Silver’ card – USA Today
- Starbucks: Steel This Gift Card – RetailWire
- Starbucks: Steel This Gift Card Part Two – RetailWire
- Sleek, Modern Coffee Mug Design By Band of Outsiders – Starbucks.com
- Starbucks Is Selling a $110 Swarovski Bejeweled Coffee Tumbler – Eater.com
Discussion Questions
What do you think of Starbucks’ pricing strategy with its limited edition gift cards? What successful limited edition products and promotions have you seen from other retailers?
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Mohamed Amer, PhD
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Gene Detroyer
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
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Most people will yawn or thumb their noses at this promotion, and most people will say it’s far too expensive, and perhaps even ridiculous. However, what you need to understand is that Starbucks has a large enough group of very loyal, fanatical, and cult-like worshipers (I admit to being one) and there will be an adequate number of sales for these items, I guarantee it.
These types of promotion items are collectors’ items. They are not targeted to the value-seeking consumer or to the practical thinking consumer. These items are for Starbucks fanatics. In addition to that, these items make for “fun” gifts that also become conversation pieces and have novelty. And no this is not for the consumer that thinks the coffee at McDonald’s is just as good (wink).
I shared this story with my wife, a dedicated Starbucks customer for years, and all she did was shake her head in disbelief. It’s hard to comment and offer an opinion because regardless of my personal opinion, I’m sure there are plenty of folks that will purchase this card. The logic of purchasing a $200 card with the ability to purchase $50 worth of coffee is beyond me. This may be more of a comment on the state of personal wealth than it is about sound marketing practices. Perhaps I should simply say, “let them eat cake.”
The most successful limited edition products that come to mind are sporting event and music concert t-shirts and memorabilia. Conference champions, Super Bowl, Stanley Cup playoffs, etc., are all events that are monetized successfully with merchandise. How many t-shirts will the Stones sell on their latest Zip Code tour?
Limited edition equates to exclusivity and brand allure. Starbucks’ customer base is huge and all they need is demand from a tiny fraction of their customers to sell out early (which further creates the sense of exclusivity).
In the mind of those consumers that can secure the Starbucks Mother’s Day gift card, they associate the quality of the details and craftsmanship with Starbucks’ framing of their coffee as artisan-like in quality and experience. This further internalizes Starbucks as an integral part of their lifestyle — even an integral part of their sense of identity. Powerful and effective marketing!
I am sure it will work for some people, but if I got this for my wife I would be disowned for Father’s Day.
I like the idea of reinforcing the brand mystique. On the other hand, they need to get the pricing right as an extreme price will convey arrogance.
These gift cards seem a bit out of line with Starbucks’s pricing strategy, but perfect for their cult-like following. Their usual products might not carry premium prices, but I’m sure it will be a smash hit with enough of their super loyal customer base right in time for Mother’s Day.
If they are smart, they will stack the gimmick with a very limited supply to taunt the skeptics and entice the loyal fewer and fewer to stay tuned for more great offers. The good news is there is no political or social message tied to this marketing ploy. Toning down the king’s opinion may be overdue, but nevertheless a welcome subtraction from the voice of Starbucks.