Why Blue Apron Keeps Offering Deals to New Customers

Blue Apron's Strategy: Attract New Customers With Special Offers

Blue Apron, a meal delivery service based in New York, keeps running special promotions for people who haven't used the service before. The company went public in 2017 when meal kit delivery services were booming. Now the market is more crowded, so Blue Apron uses discounts and deals as its main way to get new customers. Blue Apron's website shows these special offers for first-time subscribers.

This approach is common in subscription businesses (where you pay regularly for a service). Companies often offer deals upfront to get you to sign up, even if they lose money on that first sale. They hope you'll stay long enough as a paying customer to make back that money.

What Does Blue Apron Cost?

Blue Apron charges between $7 and $15 per serving of food, with most meals falling between $10 and $13 per serving, according to industry analysis. This puts Blue Apron in the "premium" or higher-priced category of meal delivery services.

Think of it this way: running a meal delivery business is expensive. The company has to buy fresh ingredients, keep them cold while shipping them to you, and pay for delivery drivers. All these costs add up. So Blue Apron charges more than budget options, targeting people who have more money to spend on convenience rather than people just looking for the cheapest meal.

A Crowded Market

When meal kit services first became popular in the mid-2010s, lots of investors gave money to new companies in this space. But over time, many of these companies struggled. They found it was expensive to get new customers, and many customers quit the service after a short time.

Because of this, the industry has shrunk through mergers and closures. The companies that remain, like Blue Apron, are competing against each other more fiercely than before. This is why promotions have become so important—they help convince people to try the service.

The Math Behind the Strategy

Blue Apron's focus on attracting new customers shows that the company believes growth is its biggest priority right now. Rather than trying to get existing customers to spend more money or getting people to stay longer, Blue Apron is betting on bringing in lots of new people.

This creates a challenge for the company's operations. When lots of new customers sign up at once (thanks to a promotion), the company's systems need to handle the sudden increase. The company uses computer programs to predict how much food to prepare, plan delivery routes, and reduce waste. Adding many new customers at once makes this harder.

The Technology Behind the Scenes

Meal kit companies run complex computer systems behind the scenes. These systems manage:

• Customer accounts and billing
• Inventory (keeping track of what food is available)
• Delivery routes (figuring out the best way to deliver meals)
• Payment processing (handling your credit card)

When Blue Apron runs promotions and gets lots of new customers, all these systems have to work harder. The company needs to plan carefully to make sure it can handle the extra business.

New Competition

Meal kit services like Blue Apron now compete against other ways to get food, including:

• Grocery stores offering curbside pickup
• Apps that help you plan meals
• Amazon and other companies delivering groceries
• Restaurant delivery apps like DoorDash

With all this competition, Blue Apron uses promotions to stand out and convince people to give it a try.

Is This Strategy Working?

The meal kit industry has changed a lot since it started. It's no longer a hot new market—it's now a mature market where companies need to run efficiently to survive.

Blue Apron's heavy focus on promotions could help in two ways: it might get more customers and use the company's supply chain more efficiently. But it also has risks. Attracting customers with deals might bring in people who are only interested in cheap meals and will leave as soon as prices go up. Plus, spending a lot of money on promotions means the company needs to make sure it's actually profitable in the long run.

What's Next?

Blue Apron's future success depends on whether it can turn promotional customers into long-term, loyal subscribers. The company also needs to keep improving its technology and delivery systems to stay competitive with other food delivery options. Only time will tell if this promotional strategy helps Blue Apron grow sustainably or if it's just a way to survive in a tough market.