Dunkin CEO optimistic about mobile initiatives

Dunkin' Brands' CEO Nigel Travis spoke at great length about the potential of the company's mobile initiatives during Tuesday's Wells Fargo Securities Retail and Restaurants Summit.

Dunkin' Donuts unveiled its mobile app for iPhone, iPod Touch and Android smartphones in August. It includes payment and m-gifting platforms.

Travis said the app has the potential to save franchisees money as an alternative to credit card fees that are applied to the operator.

"If you get a regular customer coming in five times a week, which a lot of our customers do, that is a significant amount of savings. So (the app) is going to help with franchise profitability and customers are able to get their food faster," he said.

In a few weeks, Dunkin' Donuts is expected to begin issuing offers through the app.

"This will give us a cutting – more aggressive – edge and it will also give us a base for more loyalty moving forward," he said. "The app is absolutely essential to our future and it's the foundation for a lot more things we're going to be talking about."

Another benefit that is expected to come from the app is one-to-one marketing. Travis, who is a Papa John's veteran, talked about the advantages of knowing your customers' habits.


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"When I was at Papa John's, we knew where every customer came from because they had their pizzas delivered. QSRs don't have that same information," he said. "We're about to get to that stage – where we can do one-to-one marketing, we can know what your behavior is and what offers you're responding to."

He added that this type of data generated a 2,000 percent return at Papa John's.

Dunkin' Brands has also invested heavily into its operational technology. Currently, 95 percent of the system has the same point-of-sale platform, as well as surveillance systems and scanners, the latter of which is the link to the company's app.

"We're excited about our whole technology piece. (The mobile space) fits our brand perfectly. Our customers love speed and the ability to pay quickly, and there's a lot more to come," Travis said.

Product pipeline

Another topic Travis discussed during the Summit was Dunkin' Brands' product pipeline. Guests can expect a new lineup of breakfast sandwiches in the next 12 months, which will complement Dunkin's "important" beverage category. The beverage line will also continue to evolve, with new products coming out to fit both the winter and summer months.

"We've got a pipeline here that our franchisees are very excited about. We've got products that we can fold in for several years, and some products we've had that we can bring back," Travis said.

The afternoon daypart is expected to continue growing at Dunkin' Donuts, buoyed by its successful bakery sandwich line, and Travis said the brand can potentially compete with McDonald's during the lunch hours.

One of the brand's greatest opportunities is its K-Cup offerings, which are expected to generate positive comps this year. The two biggest K-Cup drivers have been limited-time promotions (for example, Dunkin' Donuts is currently promoting its pumpkin K-cup flavor) and in-store merchandising.

"One of the things retail does better than QSR is merchandising and we've focused on merchandising for our K-Cups," Travis said. "It's put in an area where people will pick them up on impulse. It works very well and is very powerful."

As for what to expect throughout the end of the year, Travis said it's hard to gauge right now because there is still a lack of consumer confidence. Until the presidential election is over and the New Year, there won't be much clarity, he said.

Compared to many restaurant chains, however, the Dunkin' consumer is "resistant" and loyal.

"We feel good about the business and all the things we're doing," Travis said. "Our pipeline is terrific, our marketing is more focused and maybe sharper, we have an advertising fund that will increase at disproportionate rates (versus competitors) and our mobile app will be a major weapon we're going to use. It will take us into a new area of loyalty and we're excited."

Read more about mobile initiatives.

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