- WHITE PAPERS
Sonic executives provided a peek at some of its 2014 initiatives during the company's Q1 earnings call Monday afternoon, as well as a summary of initiatives that have been working so far. These efforts contributed to the quarter's 2.2-percent increase in systemwide same-store sales.
Like many of its peers, one of Sonic's big focuses this year is technology. CEO Cliff Hudson detailed the POS rollout, "POPS" (point of personalized service) system and supply chain management platform.
Sonic is currently upgrading its point-of-sale system across the country, and it is expected to be fully deployed at company-owned stores this year. Franchised locations are expected to have the POS in place in fiscal years 2015 and 2016.
As the POS system goes live in more company stores, Sonic will add POPS. Hudson describes POPS as a new "digital point of personalized service."
"When you take the POPS system and combine it with our physical drive-in format, this should allow us to engage customers where they live and using the likes of mobile technology and social media, both on-lot and off-lot," he said. "This will provide an opportunity to more fully integrate the Sonic experience with customers."
The company expects this "more targeted and personalized" initiative to be a significant factor in sales growth and a brand differentiator within the next several years.
"It is our view (because of the drive-in format) that we have the ability to maintain and connect with customers with targeted messaging and customized promotions in a way our competition doesn't really have," Hudson said.
There are currently about 60 drive-ins with the POPS system, with the first implementation about two years ago. The company continues to test content to drive sales.
"The beauty of this thing is it's the gift that keeps on giving. You have the ability to evolve it," Hudson said.
Supply chain management
Sonic also recently implemented its Supply Chain Management system, which Hudson said should "provide greater transparency from suppliers, vendors, distributors, down to the store level." The new software has a forecasting component, which will allow the company to model the financial impact of promotions and manage inventories more efficiently, Hudson added.
"Each of these technological improvements and initiatives should yield both top and bottom line improvement for our franchisees and, in turn, we think help fuel growth," Hudson said.
Product pipeline and marketing
In addition to its technology investments, Sonic has also gotten a boost from its product pipeline and marketing efforts. The company continues to throw more weight behind its "Two Guys" national campaign, which has contributed to a 40-percent increase in share of voice in the QSR segment.
"Our objective was to increase brand awareness and ad awareness all across our system to, in turn, drive traffic and sales. We are really pleased with the results," Hudson said.
Another drive of same-store sales has been the chain's product pipeline. In fiscal 2013, for example, the company touted its Summer of Shakes promotion with 25 different flavors, as well chicken sandwiches, cheesecake bites, breakfast offerings and more. Such menu news, Hudson said, has allowed the brand to better compete with the fast casual and casual dining segments.
"We have a product pipeline that we've not had in a long time and we'll continue to focus on this innovation in our food and drink lines," he said. "We can provide quality products that in many cases are on part to fast casual or casual dining restaurants. But we can do so on a more reasonable price, which sets us apart from our existing competition and sets us up for competition with fast casual in an advantageous way."
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