Dunkin’ Sharpens Focus on Digital Initiatives
At Dunkin’ U.S., On-the-Go ordering is growing double-digits.
On-the-Go ordering saw average weekly sales increase by 25% year-over-year. It made up 4% of total transactions in Q1 and at locations without a drive-thru, it represented more than 7% of transactions. Mobile orders exceed 25% of transactions at high-volume sites in many urban areas. “On-the-Go Mobile ordering is a winning proposition for Dunkin', enabling our guests to get in, get out and get on their way,” said David Hoffmann, Dunkin' Brands Chief Executive Officer and President of Dunkin' U.S. in a call with analysts. “Nearly half of Perks members use it today, but there is still tremendous opportunity to grow and to own super convenience in a bigger way.”
As part of its efforts to deliver convenience to its guests, Dunkin’ acquired a perpetual license to the code that runs the Dunkin' mobile app, which Hoffman described as “the backbone” to the brand’s digital initiatives including mobile ordering. The move enables Dunkin’ “to be faster to market and more flexible with our digital initiatives,” he said.
Recently Dunkin’ launched a pilot test of multi-tender at more than 1,000 Dunkin' locations, allowing guests to earn DD Perks loyalty points regardless of how they pay. “We believe multi-tender is a true unlock to grow our Perks loyalty program beyond 12% of sales as it stands today,” said Hoffman.
Other digital initiatives include Dunkin’s delivery test with Grubhub, which “is performing to our expectations, and we have expanded it to additional restaurants across a few U.S. markets,” Hoffman added.
A Modern Makeover
Dunkin and its franchisees are “making solid progress on the NextGen remodel design and expect to release it this summer,” said Hoffmann. Almost 200 NextGen restaurants are in the pipeline between new-builds and remodels. The majority of new restaurants built in 2019 will be in the NextGen image, other than a few that were already permitted and zoned in the previous design.
Editor's Note: For a look at Dunkin's NextGen look, view the slideshow below.
Dunkin' Brands Group Inc., the parent company of Dunkin' and Baskin-Robbins, reported Q1 results on May 2. Dunkin' U.S. delivered a strong first quarter, including 5.5% system-wide sales growth and a 2.4% increase in comparable store sales, which was the largest quarterly comparable store sales increase in four years.
“In particular, the relaunch of our highly successful handcrafted espresso platform, without impacting our trademark speed of service, has demonstrated our ability to deliver on the commitment of 'great coffee fast,'" said Hoffmann. "Going forward, the collaboration we have with our franchisees and licensees will remain our number one asset, and we will continue to work together to modernize our brands and deliver healthy growth."