Dunkin' Brands has had a good year thus far, but the stock fell in late July after its second-quarter earnings report, which showed decreasing foot traffic and a 1.4% year-over-year sales growth rate.
But the remodeling of many of its US locations, and net addition of 50 "next generation" stores this year, could fuel Dunkin's business. The new stores will have taps that pour coffee out on-demand, kiosks that customers can order from, and a fresh and modern feel. The stores are designed to speed up the sales process, which is something the company has expertise in. "Speed is out competitive advantage," Scott Murphy, Dunkin' Donuts US Chief Operating Officer told TheStreet.
Part of the strategy is to use the revamped stores in tandem with its mobile app, which it needs customers to download in order to compete with Starbucks (SBUX - Get Report) , which has invested in its mobile ordering platform. "Digital marketing is becoming a huge way of how we connect with people, and we connect with them one on one," Murphy said. Not only could the app drive people to the stores, but it is partly designed to understand each customer, which in turn, could get those customers to spend a bit more. "I start to understand what you're ordering, and maybe what I could pair with that," Murphy said. "If I know you're an espresso drinker, maybe I give you a sandwich, or something savory to pair with that."
As far as branding is concerned, the idea is to reach the customer in a down-to-earth and accessible manner. It's possible the revamped stores will just have the word 'Dunkin'' on it, rather than the full 'Dunkin' Donuts.' "It's really just trying to talk to our guests in the way they talk to us," Murphy said. "America runs on Dunkin,'" he said. "It's how people refer to us. 'I'm going on a Dunkin' run.' It's just the vernacular."
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