October 28, 2013
In a move to keep up with the competition and changing trends Dunkin Donuts plans to launch its DD Perks loyalty program on a mobile platform. This announcement was made to analysts in US during an earnings call on October 24, 2013. According to the company, the program will be available next month at the following locations: Dallas, Orlando, Wilkes-Barr Scranton, PA and Portland MN. The company claims that the program will be rolled out in the rest of USA in the first quarter of 2014. We are witnessing, one retailer after the other going the mobile way when it comes to payments, loyalty programs and discounts. Although cash and other options remain.
Analysts have pointed out that this move could have been made to compete with the likes of Starbucks. 1 in 4 customers at Starbucks have signed up for their loyalty program, which is helping them increase their sales revenue through customer retention.
The current DD Perks loyalty program which is set to be replaced allows customers to use Dunkin Donuts card and coupons for rewards. The current loyalty program which was launched in 2011 is said to be fraud prone. There have also been incidents in the past where customers have printed out coupons and have used them more than once.
Once the program is live, DD Perks will be a part of the existing Dunkin Donuts mobile app, launched in 2012. The current app has the following features:
The company claims that the users of the mobile app would be able to rack up points for purchases made. Customers can accumulate 5 points for a Dollar spent. Customers would be able to get a free medium beverage for redeeming 200 points. John Costello, President of Global Marketing and Innovation for Dunkins claims that the rewards sent to the customers would be tailored to their spending habits. Speaking about the reason behind this launch, Costello says We have an unusually loyal fan base. So what we’re really trying to do is increase the depth and breadth of that loyalty.
Back in July, 2013 Epsilon, an Alliance Data company had announced that Dunkin Donuts had signed up with them to provide a loyalty marketing technology platform. Speaking about this partnership would affect Dunkin Donuts, Bryan Kennedy (CEO at Epsilon) had said Our partnership will allow Dunkin’ Donuts to increase their focus on the individual customer, and build even deeper brand and business equity for their organization. This would mean that Dunkin would be able understand the customer spend pattern and send customized offers to its customers. Allowing Dunkin Donuts increase their current customer engagement levels.
Dunkin Donuts also plans to leverage a CRM platform in 2014. They have also partnered with major retailers in US like Walmart, Best Buy, CVS, Target and Gap to jointly own a payment system. This could advance their mobile payments strategy.
LTP View: The latest move of Dunkin Donuts to integrate their loyalty program with their mobile payment app is an interesting one. This move could help customers to streamline their transaction history, offers and rewards in one app. Merchants may end up handling less paper work and need not worry of fraud caused during rewards redemption. It was a much anticipated move from Dunkin Donuts for the team at Lets Talk Payments.