Brief:

• Dunkin' Brands announced a multi-year deal with mobile wallet provider CardFree for a perpetual license to the software the chain uses to build and operate its mobile ordering and payment platform in the U.S., according to a company statement.
• The deal with CardFree gives Dunkin' Brands greater control over the technology that handles mobile payments and ordering on its mobile app. It will also support the parent company's future development of digital initiatives like catering, delivery and curbside pickup, per the statement. Dunkin' Brands previously worked with CardFree to deploy the Dunkin' Donuts mobile app in 2012. The payment and gifting app was designed specifically for on-the-go customers.
• Meanwhile, Dunkin' Donuts reported same-store sales growth of 1.4% in the U.S. for Q2 2018 as its increase in average order size was partially offset by declining store traffic. The DD Perks rewards program hit 9 million members and 18 million downloads last quarter.

Insight:

The mobile payments market continues to be crowded and competitive, and by extending its partnership with a technology provider, Dunkin' Brands is reaffirming its mission to focus on digital technology development and integrating convenient ordering and payment features to its mobile app.

Dunkin' Brands has embraced mobile tech among its investments in digital-based services to guests to make ease ordering and payment and promote its DD Perks loyalty program. The company has followed a blueprint for growth that includes modernizing the brand and expanding the number of stores, particularly ones with drive-thru service and more packaged goods. In February, the company announced it would add 50 "NextGen" restaurants by the end of 2019 with drive-thru lanes, beverage bars and grab-and-go snacks to cater to on-the-go customers.

It first introduced mobile ordering in 2016 to let DD Perks members order ahead by as much as 24 hours in advance and avoid lines in stores. The breakfast chain also has integrated mobile ordering platform with Waze's "Order Ahead" feature and the General Motors Marketplace, the in-vehicle infotainment system for eligible U.S. Chevrolet, Buick, GMC and Cadillac vehicles. In March, the breakfast chain added a mobile feature to let customers place hands-free orders through Google Assistant, the search giant's voice-activated assistant on iPhones and Android phones. Dunkin’ continues to look at other voice platforms, according to its statement.

While Dunkin' on Thursday reported Q2 2018 profits that missed estimates, revenue beat analyst forecasts. The company is growing its customer base, as reflected in the multiyear high in consumer purchase intent data tracked by LikeFolio. Still, the company's ramping up of its digital offerings and investment in technology, like the latest CardFree deal, will likely take a tool on profits, despite solid quarterly sales.