Krups' Pitch for Its $2,500 Coffeemaker: It'll Save You Money!
This just in from the catalog of the absurd: This holiday season, coffeemaking powerhouse Krups -- with the help of its PR firm -- is doing its darnedest to juice Christmas sales. How? By pitching a $2,499.99 coffeemaker as a way to "save money" on your daily cup of joe.
The device in question, the KRUPS EA9000 Barista Full Automatic One Touch Cappuccino Machine, costs one penny less than $2,500 on the KRUPS website. That doesn't include sales tax, shipping, or $6.95 for gift wrap. (If you're already laying out more than two grand on a coffeemaker, you might as well spring for the gift wrap, right?)
Now, no doubt you're thinking that's a lot to pay for a coffeemaker. And we'd say you're right. But according to public relations firm 5W, we're both actually wrong.
5W lays out the case for why KRUPS' new wunder-machine will actually "save you money in the long run."
"Many consumers ... spend [from] $1.38 (the average price of a cup of brewed coffee) [to] $2.45 (the average price of an espresso-based drink) daily."
"Spending $2.45 [on] a specialty coffee drink from your favorite coffeehouse each day for a year adds up to $894.25. Over 5 years, $4,471.25. And in 10 years? You've spent $8,942.50 on java without even realizing it!"
But the KRUPS EA9000 can change all that by giving you "expert preparation of superior espresso-based beverages"...
...and "the coffeehouse-quality java drinks you crave with the same ease and convenience but without the added costs over time."
But does this argument really hold bean-flavored water?
It's a Bargain! (Sort of.)
Perhaps not. Let's start with the obvious. When you hand over your $2.45 to the Starbucks (SBUX) barista, you're paying for the coffee preparation apparatus, yes. But you're also paying for the coffee itself -- and unless you're a purist, for the cream and sugar, too. The value of the ingredients could run as much as an extra dollar a cup for high-end Kona coffee, some nice organic half-and-half, and a packet or two of Splenda.
So unless Krups has hooked its cappuccino maker up to an inexhaustible cornucopia of coffee, milk, and sugar, you're going to have to buy these ingredients for yourself -- increasing your total cost of ownership well beyond the EA9000's list price. (And did we mention that price is $2,499.99?)
%VIRTUAL-article-sponsoredlinks%So let's stick with 5W's logic. Making liberal use of our grade-school rounding skills, let's say that your coffee fixings will run you $365 a year. Thus, your cost for the EA9000 is $2,865 after one year, $4,325 over five years, and $6,150 after a decade. So, yes, 5W's right about the Krups machine being cheaper than a coffeehouse over time -- it breaks even after about five years, during which you hope the machine doesn't break and that you don't lose custody of it in a divorce.
%VIRTUAL-article-sponsoredlinks%But how does it deliver for its super-premium price tag? With its $2,499.99 price tag, you'd probably expect the KRUPS EA9000 to come with a full complement of five solid-gold "stars" from reviewers on Amazon.com (AMZN). But in fact, a quick glance at the reviews of the device show that Amazon buyers are actually giving the device only three-and-a-half stars!
Five of the 13 reviews on file come not from actual buyers, by the way, but from folks who were given the devices to try out free of charge under Amazon's "Vine" review program -- and even then, one brave soul couldn't bring herself to rate the device higher than three stars. Six of the remaining reviews come from people whom Amazon was unable to "verify" even bought the device. So, it's possible that only two of the folks who reviewed the EA9000 actually bought it.
Time to Get Creative
According to Bloomberg, total spending over Black Friday weekend was down 2.9 percent versus 2012. The metrics on Black Friday per se were particularly disheartening for retailers, with analyst ShopperTrak saying sales dropped 13.2 percent year over year, and foot traffic down 11.4 percent.
So it seems that the traditional retailer strategy of selling lots of stuff cheap and hoping to "make it up on volume" isn't working out so well this year. That being the case, what's left to try? Apparently, at least according to this particular marketing campaign, it's targeting well-heeled shoppers to try and "make it up on price" instead.
Bottom line: There are farcheaper coffeemakers out there. We're talking decent ones that run about $2,400 less than the Krups. But if you are longing for a coffeemaker that gives you bragging rights, and need to lean on the per-cup math to justify the purchase, the EA9000 is the one for you.
Motley Fool contributor Rich Smith loves coffee -- but even he has his limits -- and $2,499.99 coffeemakers are pretty far beyond those limits. He has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Starbucks. The Motley Fool owns shares of Amazon.com and Starbucks.
