Dunkin' Donuts is testing a new store concept that could boost its mobile order-ahead service (DNKN)

dd perks rewards members
dd perks rewards members

BI Intelligence

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Dunkin’ Donuts is piloting a new “next-generation concept store” in Quincy, MA where it will test multiple new offerings related to ordering, payment, signage and branding, and more, before choosing whether or not to roll them out broadly, according to CNBC.

One of these offerings will be a specialized drive-thru lane for order-ahead customers that merges directly to the pickup window, allowing them to get their food and beverages more quickly, according to Boston.com. The firm will also implement digital ordering kiosks in the future.

The play could help Dunkin’ improve its rewards engagement and digital performance.

  • Dunkin’s mobile performance is lagging. Mobile order-ahead, which Dunkin’ launched to rewards and loyalty members in summer 2016, comprises between 3% and 4% of the chain’s total transactions. For context, Starbucks’ comparable offering hit that figure just nine months after launch, and doubled it by the 18-month mark, where Dunkin’ is now. Since mobile buyers, who by rule are loyalty members, tend to spend more overall and per-order, Dunkin’ has a reason to look to grow that program, especially as mobile commerce (m-commerce) rises.

  • Incentives could help. Giving customers a reason to try mobile order-ahead could help convince more users to do so, especially since a unique option like an accelerated drive-thru lane could grow in popularity, as car commerce is poised to go mainstream in the next few years. Barring technical or logistical challenges, it's likely the test in Quincy will succeed, which could bring a similar offering to other eligible Dunkin' stores. If we do see a broader rollout, that in turn could propel DD Perks membership in those regions, ultimately helping to grow engagement and spend at the quick-service restaurant (QSR). But the firm will need to watch out for drawbacks — sometimes, mobile order-ahead becomes too popular, leading to even longer waits or the need to hire additional staff — and preemptively work to address problems at pilot locations before going national.

Dan Van Dyke, senior research analyst for BI Intelligence, Business Insider's premium research service has written a detailed report that explores the digital payments ecosystem today, its growth drivers, and where the industry is headed. The report also: 

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  • Highlights five trends that are changing payments, looking at how disparate factors, such as surprise elections and fraud surges, are sparking change across the ecosystem.

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