Wednesday, March 7, 2012

Sprinkles Cupcakes Strategy Session

Yesterday, a friend of mine shared this article about the beloved cupcake bakery, Sprinkles, which is going to begin 24-hour distribution of cupcakes through specialized cupcake vending machines that are designed to look like ATM's.

Candance Nelson, who founded Sprinkles bakery admitted that she had the idea for the cupcake ATM "after having late-night sugar cravings while pregnant with my second son." The "cupcake automats" will allow Sprinkles to sell cupcakes 24-hours a day for customers who have cake cravings late at night.

After reading about the cupcake ATM's, I sarcastically joked that I already had one installed in house - and it was called a refrigerator. Then I contemplated the idea some more. Although it's creative, I didn't think it was fully baked yet.

First, I thought about why vending machines are popular methods for selling stuff. They're great because they can overcome restrictions to time and place. A vending machine can bring your product most anywhere at a lower cost and stay open anytime. Mrs. Nelson's cupcake ATM's currently seem to be neglecting that second dynamic of a convenient place.

Secondly, I thought about the connection that they were making with cupcakes and banks. Both don't really have too much in common, so the mental hurdle that the consumer must leap to arrive at "open 24-hours" is a tall one.

I continued to think about connecting banks and baked goods beyond 24 hour operations. If that's the only hook to selling an single cupcake, then wouldn't it make more sense to put those resources into selling them by the dozen for customers who want their cupcake ATM a little closer to their bedroom.

To connect them I thought about the product and why people buy them. The product is an individually wrapped cupcake that devours most of $5 bill so Sprinkles cupcakes are a very obvious indulgence. And people indulge when they want to reward themselves.

One possible linkage is branding the cupcake ATM's as the "Sprinkles Cupcake Reward Bank." With the cupcake reward banks, the automats can distribute cupcakes in places where an indulgence is most needed. People can reward themselves with a cupcake from the ATM after a difficult day at the office (lobbies of office buildings or train stations), reward themselves for actually getting to the gym (outside of course) or even in malls when they're already in the process of rewarding themselves with retail therapy.

If Sprinkles Cupcakes doesn't also think about the place aspect of it's cupcake vending machines, I think they will be really shortchanging their idea of a cupcake "reward bank." Now I think it's finally done.

No comments: