Lessons from the evolution of Lucky Supermarkets sweepstakes

For my readers outside California, Lucky is a chain of grocery stores similar to Big Bazaar in India or Tesco in the UK.

I am a big fan of contests and sweepstakes from big and well-known brands. Those that promise $10,000 rewards just if you fill out a contest form or something. I know, I know - the chances are rare and there is almost no way of verifying that they indeed gave away the prizes they promised. I also know that a lot of times they are just harvesting emails and phone numbers - nobody actually gets any prize. But two things give me the motivation to fill out these sweepstakes and survey forms. One, if I am buying stuff from a store anyway, I might as well participate and give it a shot - I do not have to buy anything extra to get those sweepstakes entries. Secondly, I have my junk email ids which I feed into these websites where I don't care who they sell it to. Finally, rest assured there IS a zealous customer somewhere (other than the law enforcement) who will check if the prizes were indeed given out and if someone cheated, etc. Wherever and whoever you are on the map, there is always someone crazier than you who will do that for you.

If I remember correctly, this is the third iteration of Lucky's sweepstakes which they roll out annually in various avatars. Let me rephrase that - this is the third year in a row that I am participating. The timing coincides with the Spring-Summer season each time - another topic of discussion for some other day. But the topic of this post is the evolution of the sweepstakes and the gradual ease of participation that they have got right this time.

First up, let's compare the prizes. In the first year, they rolled out a simple game. For each $10 you spend, you get a stamp. Collect enough stamps and you can get pots and pans. If you have unused stamps, you can buy just stamps for raw money. The "game board" as they like to put it was in the Lucky brand colors - red, black and white. It was simple, comprehensible, but bland. The options (prizes) were limited and did not cater to everyone's needs or fancies. You could, technically, buy more stamps to fill out your chart and get to the golden points. However, buying stamps with money to fill more slots on the board which in turn gets you a crock-pot which you could buy with money anyway takes the fizz out of the game. And what do I do with the spillover stamps I have? Tough luck - you get nothing, nada.

The next year, they had a better game plan. The game board was more colorful and had a lot more prize/ sweepstakes options. You get different stickers, you put them on different numbered slots, and then you mail them in once you complete one block. You are getting three stickers for every $10 you spend. What was wrong with this model? First of all, the "stickers" did not really stick. They were bad quality stamp glue which you had to lick and affix. Also, you could do nothing with the extra stickers - you hang on to them and purchase a new game board, hoping one of them clicks and you put it on the new ones.

The stickers themselves are worth a blog post on their own, from all statistical, financial, psychological perspectives. But here is a small trailer. One qualifying purchase = one set of three stickers. There is a game of chance already when you tear open that pack of three stickers. In this gamble, the house always wins because the same set of three stickers as they were printed make their way into the same store, which you end up getting multiple times. How do you increase your chances, then? Shop at different stores, even within the same geographical area! Also, if you are out of town and find another Lucky, go grab as many stickers as you would need in your next grocery shopping list. Statistically, you should be sampling from a different set which increases your chance of completing one block of stickers. There is huge product placement, there is great gamification and psychological push, plus a lot more. More importantly, from a pure economics standpoint, the company gets to be in the driving seat and can control the market and drive sales/incentives; simply by controlling how many "winning stickers" they release into the market when.

What are the things which they corrected this time? No more lick-your-stamp-stickers this time. You get actual stickers: peel them and stick them on the board. Spurious stickers go into dedicated slots where what you put doesn't matter - each purchase therefore definitely counts. They still retain the power over the game participants and by extension, the market. In the stores, they have actually marked out products very clearly on the aisles that also feature on the game board. This connects the game with the physical product - the stickers are no longer just plain pawns on a chess-board. Finally, spillover stickers that did not fill out any of the boxes still count in the final raffle draw when the rest of the competition ends - the element of buyer's regret is definitely mitigated. This last one I suspect is the result of some legal action by some customer - remember the guy who is crazier than you who lives in the same zip code?

Having sung all these praises for Lucky, I do have a few gripes. They seem to be killing the goose that lays the golden eggs by asking you to purchase stuff worth $20 in order to get three stickers - yup, double what it used to cost before. This really sucks, as it almost negates the pain they have taken out of using those stickers and what they promise to deliver. They could engage more people by making it more painless - instead of me actually sticking tiny bits of paper on a glorified poster (a.k.a. game board), they could convert the game into an online rendezvous with codes instead of stickers so that you maintain your game board online. Besides being more secure, they can open up more revenue opportunities by encouraging people to buy more stuff online and get special incentives (an extra sticker, perhaps?) for online purchases. Also, instead of yet another drawing at the end, the leftover stickers could be converted into a partner's credit line: for example if you have 20 or more stickers left, you will get 50 cents off your next gas purchase at Shell. That should actually take care of the lawsuit I suspect which drove this leftover raffle in the first place.

Well, Lucky - are you listening? :)

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