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Panera lets customers pay what they want

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Re: Panera lets customers pay what they want

#21

Post by curio »

Batsu wrote: post #11

I like how it looks on the outside as an experiment, but it obviously can't be sustained without rules -- surely they won't let someone come in, take everything for a penny, and leave? It has the stench of a publicity stunt, but it seems well intentioned nevertheless.

that reminds me of the girl who takes advantage of the zappos free returns policy and gets 5 new pairs of shoes every singles week only to mail them back a few days later. but zappos doesn't cut here off -- she is important evidence that they are serious about their policy & for zappos there are enough honest people out there to more than make up for her.

Re: Panera lets customers pay what they want

#23

Post by lsc »

robryan wrote: post #22

While I can see this as a valid experiment in the digital world where each additional copy doesn't cost you anything, it doesn't make much sense when each item has a cost to produce.

I can see why it might not work because each item costs something to produce, but that doesn't make it an invalid or uninteresting experiment.

My expectation would be that the experiment will fall with the current model (put some money in a jar) - I would guess they would do better with something less anonymous, with more room for social pressure.

On the other hand, four is shockingly cheap when bought in bulk, and service workers are also not particularly expensive, so it's quite possibly they'll be 'facebook profitable' and if you've got a large corp willing to cover your CapEx, that's good enough.

Re: Panera lets customers pay what they want

#24

Post by robryan »

lsc wrote: post #23
robryan wrote: post #22

While I can see this as a valid experiment in the digital world where each additional copy doesn't cost you anything, it doesn't make much sense when each item has a cost to produce.

I can see why it might not work because each item costs something to produce, but that doesn't make it an invalid or uninteresting experiment. My expectation would be that the experiment will fall with the current model (put some money in a jar) - I would guess they would do better with something less anonymous, with more room for social pressure. On the other hand, four is shockingly cheap when bought in bulk, and s…

An interesting side effect of money in the jar though is that people are socially pressured not to take change from the jar, meaning they may pay say $5 instead of the $3 they normally would because they had the note.

Re: Panera lets customers pay what they want

#25

Post by Gormo »

Batsu wrote: post #11

I like how it looks on the outside as an experiment, but it obviously can't be sustained without rules -- surely they won't let someone come in, take everything for a penny, and leave? It has the stench of a publicity stunt, but it seems well intentioned nevertheless.

Do you think prescriptive rules are necessary, or is it better to handle these kind of situations on a case-by-case basis?

Most social systems seem to be based on a maximin decision rule, and try to minimize the impact of imagined worst-case contingencies (there was an interesting thread on HN last week discussing this) - but perhaps we would realize our objectives more effectively and minimize the entropy that accumulates by too often adding new rules if we instead optimized the system to the general case, and dealt with outliers (as catastrophic contingencies necessarily are) specifically and individually.

Re: Panera lets customers pay what they want

#26

Post by ABrandt »

wheels wrote: post #15
ABrandt wrote: post #12

I worked at Panera (St.Louis Bread Co. actually) for three years back in high school, and this new store is literally down the street from me. Every one of their locations already donates a huge amount of baked goods to local charities each and every day. I would say on average, my store either threw away or donated 75-100 lbs. of food from our bakery every night (and this is a low ball estimate). And that's exactly…

I'm not sure it works that way -- the amount baked is basically one standard deviation above expected demand on a given day so that people don't show up and the shop is out of bread. It's stabalizing demand, not driving it up, which would reduce waste and I don't see any way that this addresses that.

This is true, we did put quite a bit of effort into properly forecasting demand. At the end of each day I'd count every piece of food we had left, feed that into some software along with some variables such as weather, and try to calculate what we needed to bake that night. Turns out even with an extremely short forecasting horizon, it's damn near impossible to accurately predict how much fresh bread people want in any given day at a particular store. (I'm not sure if we did use one standard deviation, and if we did that would only account for 68.3% of variation anyways). I've literally been screamed at for not having any whole-grain bread left 10 mins. before closing time.

If I was to manage this non-profit store, I wouldn't bake according to expected demand. In this particular scenario, a reasonable amount of stock-outs would mean that you have more money left at the end of the day to donate to charity rather than covering the production costs of waste. (Of course you would want to avoid creating ill-will with too much stock-out).

But the real reason this makes sense for Panera is that they're already donating a ton of goods to charity everyday. For this store, instead of donating bread, they'll be donating cold hard cash that people fork over. Great PR and great for the community.

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