At a time when a consumer can use an app on a smartphone to have a bottle of whiskey or an iPad Air delivered to the door in an hour, an instant order of munchkins and a Box O’ Joe might not be far behind.
Dunkin’ Donuts is the latest quick-service restaurant chain to wade into the on-demand economy, acknowledging Monday that it is evaluating delivery services in conjunction with new mobile ordering technology the coffee-and-doughnuts chain is developing.
Nigel Travis, chief executive of Dunkin’ Brands Group, the parent company, called delivery a “big opportunity” in an interview with CNBC.
The company said delivery might be built into an application currently in development. The app, which Dunkin’ began testing last year, would allow customers to order and purchase coffee and food on a smartphone and pick it up at a store.
Dunkin’ declined to provide details about how a delivery service would work and said it has not begun to test the system.
Dunkin’ Donuts and other fast-food chains face a particular challenge in delivering products: keeping their hot food and drinks at the right temperatures, said Darren Tristano, an executive vice president at Technomic Inc., a Chicago food industry research firm. While things like pizza and Chinese food retain heat during transport, Tristano said, some fast-food products don’t survive as well.
“It might reflect negatively on the brand,” Tristano said. “There’s great risk along with the opportunities.”
Food chains are quickly trying to catch up with the explosive popularity of on-demand delivery services such as Postmates and GrubHub, which can provide nearly anything consumers want, whenever they want it. The chains also hope deliveries will increase sales in a relatively stagnant quick-service industry.
Dunkin’ Donuts’ same-store sales in the United States increased 1.6 percent in fiscal 2014, compared with 3.4 percent the year before. Meanwhile, McDonald’s comparable sales declined 2.1 percent in 2014. Starbucks, the leading coffee and bakery chain in the country, reported a 6 percent jump during the same period.
Earlier this year, Starbucks and McDonald’s said they both planned to work with Postmates, the San Francisco-based 24-hour delivery service, to deliver in select markets. Customers place orders on the Postmates app or website and local couriers pick up the goods from restaurants and stores. An order of a Big Mac and medium fries from McDonald’s, which includes a $5 delivery fee, costs about $11.
Although many consumers already can order a Big Mac or a Frappuccino through third-party delivery services like Postmates, these more formal partnerships allow companies to integrate the ordering process into the food chains’ own mobile applications, control the transaction, and track consumer interests, Tristano said.
Starbucks said it will launch a “Green Apron” program with actual baristas delivering coffee in New York later this year.
Dunkin’s delivery and mobile ordering initiatives are being led by Scott Hudler, global vice president of consumer engagement. The company said he was not available for an interview.
Tristano said Dunkin’s delivery service would probably increase sales modestly as existing customers shift to delivery. He said the service would appeal to consumers who are physically unable to visit a store, don’t have a car, don’t want to deal with parking, or “are just lazy and don’t want to get up and go.”