Random thought of the week

Keurig brewed up a powerful incentive at Target this week with an ad on the cover of its weekly circular touting a $30 gift card for those who purchase the B60 Special Edition single-serve brewer from Keurig for $149.99. The offer appeared quite alluring at first because $30 would help soften the blow of purchasing a coffee maker that is fairly expensive.

Upon further review, the offer isn’t as enticing as it might seem since the $30 gift card represents a modest 20% discount off the $149.99 purchase price. In addition, the gift card can only be redeemed at Target, and the $30 would get chewed up pretty quickly paying for the pricy K-cups the machine uses.

These types of gift card promotions make a lot of sense for Target, and in this case the $30 incentive might be the extra jolt needed get coffee drinkers to make a commitment to a new lifestyle and morning regimen that comes from purchasing the single serve machine. The company secures an additional trip our two as shoppers return to redeem gift cards purchasing potentially full margins goods as opposed to the company simply taking an immediate discount on a featured item.