Dunkin' to focus on expansion, one-to-one marketing
by Jeff Gelski
ORLANDO, FLA. – While Dunkin’ Brands Inc. will continue to expand geographically, especially in the western United States, a new DD Perks rewards program launching Jan. 27 will help Dunkin’ Donuts market to individual customers. Nigel Travis, chairman and chief executive officer of Canton, Mass.-based Dunkin’ Brands, explained the rewards program Jan. 13 at the Integrated Corporate Relations XChang Conference in Orlando.
His presentation focused on store development both in the United States and internationally. One theme for this year will be strengthening worldwide awareness through global branding initiatives.
“That will come through social media,” he said.
People will be able to sign up for the Dunkin’ Donuts program at www.ddperks.com/retail. Participants will receive five points for every dollar they spend. They will receive a free beverage on their birthday and when they reach 200 points.
“So it really drives people to our beverages, but what it also does, between that and our app, it gives us all the information about our consumers, and we are gradually getting into the space of true one-to-one marketing,” Mr. Travis said. “I think there are very few companies in our space who are really into thinking about individually marketing to our customers.”
Dunkin’ Donuts has a long-term expansion goal of doubling U.S. stores to more than 15,000. In its core Northeast market, each Dunkin’ Donuts store serves a population of about 9,200. In established eastern areas, such as New York, Virginia and Washington, it’s about 22,000. In emerging markets, covering mainly other markets east of the Mississippi River, it’s about 84,000 per store. In the West, or mostly those markets west of the Mississippi River, it’s about 610,000 per store.
In 2014, Dunkin’ Donuts expects 15% to 20% of its new store openings to come in the West, Mr. Travis said. Dunkin’ Donuts has advertised nationally during the past three years, which should help new stores in the West, he said.
“So even though we’ve got two stores in California, in California you see our national media,” he said.
Internationally, Dunkin’ Donuts seeks to increase average weekly sales.
“In some of our Asian markets where we’ve been for 20, 30 years, our average weekly sales are about $2,000, $3,000, $4,000 per week,” Mr. Travis said. “Contrast that with a traditional Dunkin' store in the U.S., where it’s about $20,000 a week.”
Mr. Travis said Dunkin’ needs to take its U.S. development disciplines and apply them to international development.
“We measure everything,” he said. “We measure absolutely everything, and we treat our franchise stores as though they were our own stores. If you saw our financial monthly review, I think you’d be impressed with the detail we look at. We look at the detail of the stores before they open, the detail of the stores after they open...”
Dunkin’ Brands opened four net new Baskin-Robbins stores in the United States in 2013 and expects to open five to 10 more this year. The company is testing on-line cake ordering.
“In Baskin-Robbins, we’re testing with some success in San Diego and Detroit the whole idea of on-line cake ordering, a bit like was done in the pizza industry,” Mr. Travis said.