Dunkin' Donuts Plays Catch Up to Starbucks with Mobile Ordering
Dunkin' Donuts, in a bid to catch up to the technology prowess of Starbucks Corp., is testing on-the-go ordering and delivery service in some U.S. markets.
Starting Wednesday, 124 Dunkin' restaurants in Portland, Maine, will allow customers to order ahead of time through a smartphone application. About 19 cafes in Dallas are trying out delivery, and additional locations in Atlanta, Chicago, Los Angeles and Washington also will soon start bringing coffees to customers.
"The morning space and the coffee space are incredibly crowded," said Scott Hudler, vice president of global consumer engagement. "Speed is one of our brand differentiators."
Restaurant chains are competing to draw customers with the fastest, most convenient options. Simple mobile ordering and delivery allows companies to hook customers, potentially building loyalty and increasing sales. Dunkin' Donuts, owned by Dunkin' Brands Group Inc., started a rewards program in January 2014 and has about 3.6 million members now, compared with Starbucks' roughly 10.4 million in the U.S.
Dunkin' could use some help. Last month, the company suffered its worst stock decline since it went public in 2011 after giving a profit forecast that missed analysts' estimates. The chain is facing more competition for morning meals as more brands, such as Taco Bell and McDonald's Corp., advertise breakfast burritos and Egg McMuffins.
Dunkin' says Dallas residents can order online and get coffee, doughnuts and sandwiches delivered in 45 minutes or less. The service is provided by DoorDash.
While Dunkin' has been focused on expanding its technology capabilities, it has largely lagged behind Starbucks. It's also had trouble with its app crashing after a football promotion proved too popular. Starbucks rolled out mobile ordering across the U.S. in September and added it in some U.K. and Canadian locations in October. Other chains, including Chipotle Mexican Grill Inc. and Taco Bell, also deliver food.
"This is how the next generation of consumers are going to engage with brands," Hudler said. "This is the future of the restaurant business."