Brief:

• Dunkin' Donuts plans to drive more on-the-go mobile ordering by highlighting the service in its restaurants and through dedicated advertising, company executives said during a conference call with analysts on Thursday. Dunkin' reported a 0.5% decline in U.S. comparable store sales in Q1 2018 from the prior year.
• David Hoffman, president of Dunkin' Donuts U.S., said in the call that the company's advertising during the Winter Olympics around the U.S. women's hockey team helped to drive a record-high percentage of mobile transactions from new and repeat customers. The company didn't disclose specifics but previously said mobile orders accounted for 3% of total transactions at the end of 2017.
• On-the-go mobile ordering is a popular feature of its DD Perks loyalty program, which grew 33% to 8 million members last year. Of those who placed an order using the coffee chain's app, 80% used the service again.

Insight:

Mobile transactions are a key part of Dunkin' Donuts' growth strategy while the convenience offered by mobile technology is an important and growing part of the chain's message to consumers.

The company doesn't appear to be looking to "out-comfy-couch" a competitor like Starbucks that emphasizes the in-store experience as much as its gourmet coffee and food. As Dunkin' executives explained during the conference call, the company isn't aiming to provide laid-back settings for people who want to linger over coffee as they chat with friends or use free Wi-Fi. It's mainly planning to ramp up its speed of service by weaving different technologies into its daily operations, leading to more convenient and efficient experiences for customers. Highlighting these conveniences in-store and through dedicated advertising will reinforce the message for existing customers while potentially attracting new ones who don't want to wait in line at a different coffee shop.

Another mobile marketing method Dunkin' is looking to ramp up is its loyalty program. It added 500,000 DD Perks members in Q1 2018 to hit 8.5 million total. But Dunkin' wants to emphasize one-to-one marketing and targeted offers to drive sales as it slows the pace of couponing, Hoffman told analysts in the call. That strategy is a crucial part of boosting profit margins as Dunkin' faces pressures to offer value menus to keep pace with competitors.

Dunkin' Donuts — an early and avid mobile marketer — has continued to embrace a variety of mobile technologies over the past year or so, demonstrating that it recognizes the central role smartphones hold in people's lives, especially with younger tech-savvy consumers.

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. In March, the coffee chain debuted a mobile feature that lets customers place hands-free orders through Google Assistant, the search giant's voice-activated assistant on iPhones and Android phones.