Brief:

• Dunkin' Donuts, the coffee and bakery chain with 11,300 restaurants worldwide, opened a concept store near its original location in Quincy, MA, that features a drive-thru lane for mobile orders, per a news release. Customers who use the brand's DD Perks loyalty program can order ahead on its mobile app to bypass the ordering lane and merge straight into the line for the pickup window.

• The 2,200-square-foot location also has an inside area dedicated to mobile pickups to let customers get in and out quickly. Customers will be able to track the status of their orders placed for pickup inside the restaurant with a new digital order status board. The company also plans to add order kiosks this year.

• The concept store has new signage that refers to the brand as just "Dunkin'," similar to about 30 other locations that are testing the shortened name. In addition, the store has a bigger "Grab & Go" selection that includes fresh fruit, apple sauce, yogurt, granola, beef jerky and nut butter packs.

Insight:

Dunkin' Donuts is undergoing a transformation that recognizes the central role that smartphones have in people's lives, especially the tech-savvy millennial generation born between 1980 and 2000. Millennials number about 75.4 million people, overtaking baby boomers as the biggest generational group in the U.S., and about 97% of them own a smartphone — higher than older segments.

Dunkin's main competitor Starbucks has seen a lot of success with its own mobile ordering and pickup offerings, which accounted for 9% of transactions done at the chain as of July last year. Dunkin' is translating the idea of order-ahead, pickup in-store to the drive-thru lane as well, an interesting pilot that accommodates more on-the-go consumers. A greater focus on digital and mobile initiatives like these is growing in the quick-serve restaurant category as consumers demand modernity and convenience in their dining experiences. Other national brands like McDonald's and Subway are among those building out technology like digital kiosks and revamped mobile apps and loyalty programs.  

Dunkin' is also testing out re-branded stores that de-emphasize its status as a purveyor of sugary, fried dough, adding "better-for-you" snacks like fresh fruit to appeal to consumers who demand fresher foods. The chain this month revamped its menu to cut back on the number of choices, including varieties of bagels, muffins and flavor shots, and all of its sandwiches. Dunkin' had tested the simplified menu in about 1,000 locations last year and found that fewer than 40% of consumers noticed the change, the Boston Globe reported.

While many of the mobile-minded pickup options are new, Dunkin' regularly promotes its menu and seasonal items with mobile campaigns. Last month, it marketed its dark roast coffee on the "darkest" day of the year, the winter solstice, with a #DunkinDarker campaign on social media. It also launched a holiday-themed "12 Days of Dunkin'" sweepstakes to steer people to sign up for its DD Perks Rewards loyalty program. The promotion included a Snapchat 3-D Lens that could be unlocked from its Twitter feed and via a digital billboard in New York City's Times Square and turned users into a virtual reindeer.