Dunkin' ups the digital sprinkles by taking more control of its mobile destiny

Profile picture for user slauchlan By Stuart Lauchlan July 26, 2018
Summary:
Dunkin' Donuts has been a digital champion for most of this decade, but now the time is ripe to take more charge of its own destiny.

dunkin
Following the (in the main) success of Starbucks, mobile ordering and payment capabilities to meet the needs of the ‘on-the-go’ consumer demographic have become a priority on the digital transformation agendas of QSR (Quick Service Restaurant) brands.

Dunkin’ Brands, owner of Dunkin’ Donuts and Baskin-Robbins, is a case in point. The company has been working with mobile app platform provider CardFree for years, resulting in the delivery in 2012 of the Dunkin’ payment and gifting app. This has since been downloaded more than 18 million times, while also picking up 9 million subscribers to the DD Perks loyalty program.

On-the-Go Mobile Ordering was introduced in 2016, allowing members of the DD Perks program order order ahead and jump the line in-store. DD Perks members can place a mobile order up to 24 hours in advance, select their desired location, and confirm via the app when they are ready to pick up their order inside the restaurant, or at the drive-thru.

The next stage in that working relationship has now taken place with the signing of a perpetual license for Dunkin’ to use Cardfree’s software to build and operate its mobile ordering and payment platform, initially in the US. Dunkin’ will also have “broad rights” to support future digital initiatives, including catering, delivery and curbside pick-up.

In the official blah-blah from Dunkin’, Chief Information and Strategy Officer Jack Clare, states:

Enabling guests to order and pay remotely is the leading global consumer trend occurring in the retail industry today. "Extending our successful relationship with CardFree and receiving a perpetual license to the code that supports our digital initiatives, including our gift card and DD Perks Loyalty programs, mobile ordering, delivery, and catering, will ensure that we have the best technology backbone in place and will allow us to accelerate our digital efforts.

Those efforts have included moves to drive adoption of mobile payments by enabling customers to pay via integrations with Masterpass by Mastercard, Visa Pay, Apple Pay, Android Pay and Samsung Pay. Dunkin’ has also integrated ts On-the-Go Mobile Ordering platform through Waze's "Order Ahead" feature, the Google Assistant app and with General Motors Co. through Marketplace for eligible U.S. Chevrolet, Buick, GMC and Cadillac vehicles.

Control

The deal with CardFree is about taking more control over the underlying tech that enables such initiatives. According to incoming CEO David Hoffman:

Our agreement with CardFree enables us to control our own destiny with the DD Mobile App and to accelerate important digital initiatives, such as one-to-one marketing, catering, delivery, group ordering and tender agnostic, just to name a few. CardFree has been a great partner for us and we hope to work closely with them on other initiatives in the future. Ultimately, we believe this deal will allow Dunkin' to deliver the highest level of customer satisfaction and convenience of any brand in the QSR industry and is a key component of the NextGen store.

What was a valid partnering strategy 6 years ago is less so in 2018 and beyond, he adds:

Probably the best way to look at it is we've rented that program. We didn't bring it in house, it was rented. Kind of use that term loosely there, rented in the past. As we started to see the tremendous growth in upside here, we felt like rather than continuing to rent this, I don't know, if putative is the right term, but we felt like bringing it in-house and not only controlling what we can do to build out, but also controlling our costs long-term That was the right thing for us in terms of positioning that and doing it right now...this is based on years ago not knowing how this business, that type of convenience, was going to be built out.

As noted in the official announcement, delivery and catering are two areas that Dunkin’ foresees using its greater in-house control to address, On delivery, it seems to be a case of building out the platform options. Hoffman says:

On delivery, right now, we've got a great partnership with DoorDash, but we're looking at all options right now in terms of partners for delivery and catering on the Dunkin' and Baskin side as well as the third-party aggregators.This is a big push for, I think, everyone in the industry, including us.

Integration between partners and Dunkin’s own back-end systems is something that is likely to be high up the to-do list. Hoffman notes:

DoorDash It does not integrate [with Dunkin’s back-end]...that's a key part, to make sure that we really maximize integration and when we do that that's what keeps it trackable. We think is better for what we do best at Dunkin' is the speed of Dunkin' and making sure that we have a nice integrated holistic solution.

My take

An interesting move on the part of Dunkin’ Brands.

Back in 2015, when the firm began work on Mobile Ordering and Payment, CardFree founder John Squire declared:

Dunkin’s leadership has embraced the new mobile frontier like no other.

Since then, Starbucks has rather stolen the thunder - and was first out the gate - but Dunkin’ deserves credit for the work that it’s put into its digital thinking. Outgoing CEO Nigel Evans says today that:

The next era of Dunkin' Brands is upon us.

Time to smell the coffee perhaps?