Panera lets customers pay what they want(msnbc.msn.com) |
Panera lets customers pay what they want(msnbc.msn.com) |
Every one of their locations already donates a huge amount of baked goods to local charities each and every day. I would say on average, my store either threw away or donated 75-100 lbs. of food from our bakery every night (and this is a low ball estimate). And that's exactly how a non-profit model actually might work for them. They're shifting the burden of all of this waste from the company, to the charitable consumer. Theoretically, pay what you want pricing will drive up demand for their food and thus eliminate the amount thrown away each day.
This certainly wouldn't work everywhere, but the Clayton neighborhood is perhaps the most affluent in St.Louis. Bread Co. customers are already accustomed to paying $3 for a muffin--the idea of sending all of that straight to charity could be phenomenally successful for everyone involved.
If I was to manage this non-profit store, I wouldn't bake according to expected demand. In this particular scenario, a reasonable amount of stock-outs would mean that you have more money left at the end of the day to donate to charity rather than covering the production costs of waste. (Of course you would want to avoid creating ill-will with too much stock-out).
But the real reason this makes sense for Panera is that they're already donating a ton of goods to charity everyday. For this store, instead of donating bread, they'll be donating cold hard cash that people fork over. Great PR and great for the community.
Not sure if this is a reference to how employees and customers will behave in the context of the new store or to whether or not the store will manage to stay afloat at all.
"The first location bears the name St. Louis Bread Co. Cares"
I suspect detaching themselves from the national chain brand will help; really, I think branding and location choices are going to end up being the primary success factors here.
This will be very interesting to watch.
If panera was experimenting in a vertical they were not firmly entrenched, I maybe would have a different opinion, but why would Panera really be interested in building a national competitor to their branded stores?
From the article: "...Frierdich tried to hand him $12 in cash, but he directed her to put it in the donation jar."
Seems like an opportunity for a new tech that would allow a "customer" to make a credit card donation of an amount they choose. Maybe on exit? Or... idk. Could be an interesting project for someone with a little credit card industry knowledge.
I wish more food stores operated on a minimum charge as opposed to pay nothing or whatever you want. I suppose that loses the "give a lot" mindset.
I personally think it's the part where you could pay just a penny- the store makes themselves vulnerable. If you charged a minimum, people would just pay the minimum, simple as that.
It has the stench of a publicity stunt, but it seems well intentioned nevertheless.
Most social systems seem to be based on a maximin decision rule, and try to minimize the impact of imagined worst-case contingencies (there was an interesting thread on HN last week discussing this) - but perhaps we would realize our objectives more effectively and minimize the entropy that accumulates by too often adding new rules if we instead optimized the system to the general case, and dealt with outliers (as catastrophic contingencies necessarily are) specifically and individually.
My expectation would be that the experiment will fall with the current model (put some money in a jar) - I would guess they would do better with something less anonymous, with more room for social pressure.
On the other hand, four is shockingly cheap when bought in bulk, and service workers are also not particularly expensive, so it's quite possibly they'll be 'facebook profitable' and if you've got a large corp willing to cover your CapEx, that's good enough.