Dunkin' Donuts' digital menu board success dependent on franchisee buy-in

Throughout the past two years, Dunkin' Donuts has gone from a 100-store pilot of digital menu boards to a full systemwide deployment that should see some 3,000 units outfitted with the technology by the end of this year. 

Jason Stuehmer, IT product manager for parent company Dunkin' Brands, recently provided an overview of the pilot-to-rollout strategy during an educational session titled "System-Wide Digital Menu Board Deployment — Taking the Leap from a Successful Pilot to Implementation." He was joined by Jan Malinovsky, the sales director of NCR Corp.'s Texas Digital division. (NCR Corp. was Dunkin's primary partner in the DMB rollout.)

The pilot went through three stages — planning, execution and analysis — Malinovsky said, and Dunkin' was adamant about having clearly defined success criteria beforehand and being specific in its goals and metrics that would, at pilot's end, be the deciding go or no-go factors for the full implementation.

"It gave a lot of purpose to the pilot," Malinovsky said.

Perhaps the key factor for success, Stuehmer said, was getting early franchisee involvement and buy-in.

"They could make or break the pilot, so getting them to be advocates was very important," he said. Dunkin' Donuts is almost all franchisee owned, Stuehmer said, so "they're the key stakeholders. It requires full ongoing commitment. It's not set it and forget it."

Franchisees incentivized

In addition to mandating the digital signage boards in new store builds and remodels, Dunkin' worked to create incentives for franchisee buy-in. The chain also created an enrollment program to get franchisees to commit to the pilot or the deployment so NCR could then go to suppliers with a definite number of eventual deployers to get volume pricing. Franchisees paid all the expenses of the digital menu boards, but Dunkin' Brands does help with ongoing content costs and other recurring expenses.

The menu boards sync with each store's point-of-sale system, which has made an old issue for the chain a non-issue, Stuehmer said. As a way to incentivize store managers to keep their static menu boards up to date, Dunkin offers a refund to customers who receive an inaccurate receipt, regardless of whether they were charged too much or too little.

"But now, because of the integration, it's a non-issue," he said.

Despite the incentives, there have been one major point of resistance from franchisees.

"Price. Price. And then price ... It was nearly a two-year selling cycle to them," Stuehmer said.

Details of the system

The initial pilot comprised 100 locations, and the rollout is now up to 2,000 with a target of 3,000 by the end of the year. NCR Corp. and its Texas Digital subsidiary provided the software and media players, with NEC Display Solutions providing most of the screens, along with some small-format Samsung displays, Stuehmer said. The standard screen is NEC's V463, with an LED backlight that helps with LEED certification for locations.

"Our franchisees were very happy with that line," he said.

Among the key lessons from the deployment is that content is key, the speakers said:

• Regular updates keep customers engaged. Even good content needs to be refreshed or changed. "Ultimately, if your signage doesn't change over time, even if it's great, it becomes static," Stuehmer said. "And at that point the investment in the technology really becomes a poor investment."
• Balance movement to maintain customer focus. Some movement is good to attract attention, but it's best to use subtle movement, Malinovsky said. "Just because you can do something doesn't mean you should," he said. "Movement is good, but there's certainly opportunity to overdo movement on digital menu boards."
• Design with flexibility for market variations. Stores' physical profiles vary widely across the chain, Stuehmer said, so the DMB design needs to be flexible enough to account for kiosk and roadside express locations, as well as full stores with varying footprints. "We have to understand the profiles ... in order to assign the proper content to them."
• Let software do the versioning work for you. For those stores with different physical profiles, or for locations with menu restrictions or requirements, the messaging displayed on the DMBs will have to change based on profile attributes. The software should be responsive to those profiles and change the content automatically, Stuehmer said. "Let the software do the work for you."

Content over technology

They also offered these bullet pointed additional lessons from the pilot and subsequent rollout:

• Customers interact with content, not the technology.
• Communication is crucial.
• There's no such thing as too much planning.
• Understand all system variations.

"Mistakes will be made; it's better to make them in the pilot not the deployment," Malinovsky said. "It (the pilot) has been a crucial map ... It's been a process of exploration. If you're not doing it, you're going into a rollout blind and really doing yourself and your franchisees a disservice."

While Stuehmer declined to disclose the specific goals for the pilot, he did acknowledge that "sales lift was definitely one metric." But many of the goals for the pilot and the subsequent rollout, he said, were for a softer ROI, such as preparing for the menu labeling regulations that two years ago were expected to be imminent.

"We're waiting, just like everyone else, on the FDA to rule on the federal legislation," he said. "[But because of the deployment] right now we feel like we're ahead of the game."

The move to digital was also about staying relevant in the competitive and ever-evolving restaurant space.

"It's keeping up with the Joneses," he said.