Easily digestible tech news... http://www.techdirt.com/ en-us http://www.techdirt.com/images/td-88x31.gifhttp://www.techdirt.com/ Wed, 3 Nov 2010 06:43:49 PDT Mike Masnick http://www.techdirt.com/articles/20101028/23482911646/panera-s-pay-what-you-want-restaurants-are-working.shtml http://www.techdirt.com/articles/20101028/23482911646/panera-s-pay-what-you-want-restaurants-are-working.shtml testing out a "pay what you want" concept restaurant in St. Louis. It was set up as part of a non-profit charitable foundation, rather than as part of the corporate Panera structure. However, at the time, I noted that I wasn't sure how well it would do, since "pay what you want" for scarce goods seems like a much more dangerous idea. I also pointed out that while I was sure many people would pay the "recommended" prices, and some would obviously pay much less, I doubted many would pay more than the recommended prices to make up for those who paid less. I did note that I hoped to be pleasantly surprised by the results... and now I should admit that I am.

Declan points us to the news that the company is actually expanding the effort, with an expected "pay what you want" opening in Portland. That article also notes that the company has said the original one has been a success. As I expected, the majority of people do just pay the recommended price, with another 15% paying less (or even nothing). But, a separate 15% actually do pay more than the recommended price.

I'm still not convinced this kind of offering works that well in all cases, especially with scarce goods, but I think we're beginning to see scenarios under which it can work. For example, we did recently discuss a study that found "pay what you want" appears to work much better with a charitable component, which is definitely the case here. Separately, we've seen that it can work if you really connect with people, and apparently Panera worked hard to really connect with the local community to make this restaurant work. It'll be worth watching to see if it can replicate that success elsewhere.

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]]> how-about-that http://www.techdirt.com/comment_rss.php?sid=20101028/23482911646 Wed, 19 May 2010 10:27:38 PDT Mike Masnick http://www.techdirt.com/blog/entrepreneurs/articles/20100518/1505489473.shtml http://www.techdirt.com/blog/entrepreneurs/articles/20100518/1505489473.shtml pay what you want model in one of its new restaurants. There are "recommended" prices -- but you can pay more or less than those numbers. This seems to be a take on the trend that became popular last year of restaurants offering certain days or nights where you could get free meals, which some restaurants found actually resulted in much more revenue (along with more loyal customers).

While I'm intrigued with how this will work out, I'm not convinced it's going to be a success (though I'd be pleasantly surprised to find out I'm wrong). The whole thing is actually set up separate from Panera, via a non-profit foundation, which Panera is supporting. The restaurant won't use the Panera name, but St. Louis Bread Co. Cares, which apparently was the company's original name. I would guess that many people will feel guilty enough to pay the list price, though some will obviously pay less. I doubt very many (if any) people will really pay much extra, which puts the operation in a tricky position. Since we're talking about food and salaries, there are real scarcities to deal with in terms of expenses, so a "pay what you want" model seems like it would have difficulty scaling.

Still, as business models go, it's one worth watching.

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]]> trying-it-all-out http://www.techdirt.com/comment_rss.php?sid=20100518/1505489473