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APPs Act. 22 Aug 2017

Dunkin' Donuts and Starbucks opt to combine mobile payment apps and loyalty programs

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Last year the multinational chain of cafés specialized in donuts Dunkin’ Donuts initiated a strategy for renewing its customer base by giving more importance to the role of mobile devices. Consequently, it designed a loyalty program similar to that of Starbucks, which was ready to launch at the start of this year.

Following the steps of the Starbucks application, one of the latest reports by Business Insider Intelligence refers to the considerable success of Dunkin 'Donuts' mobile app. The use of this app does indeed follow a model of use that is very similar to its rival Starbucks: as a means to accumulate loyalty points and pay at the company's outlets.

Dunkin’ Donuts has not informed the media about the turnover in dollars that its app generates, but it has given clues about its success among consumers: it has already been downloaded over 10 million times since its launch in August 2012 and payments made through the app represent over 15% of the company's transactions in its stores in the U.S.

The parallel success of two apps

According to Business Insider Intelligencethe loyalty program is one of the main reasons for the success of the Starbucks mobile payment app, and the reason why Dunkin' Donuts wanted to follow a similar approach. Both apps are based on the use of QR codes and barcodes, which enable users to pay with their cell phone in the shop through a scanner that is connected to the cash register. And when customers use them, they accumulate reward points , which are called DD Perks in the case of Dunkin' Donuts, that can be redeemed for free drinks of any size.

The DD Perks program resulted from the change in strategy made late last year, but Dunkin' Donuts decided to integrate this new service on the existing app, with it now becoming one of its most attractive features. In addition, the company added new features like the ability to share these reward points, requiring only the recipient's email address to send it directly from the app.

A step further in a winning strategy

Dunkin’ Donuts has decided to celebrate the success of its mobile strategy with several promotions. First, it has awarded the two millionth user of the DD Perks program, Jae Choi, with free coffee for a year, $1,000 in cash and a trip to the place where the chain was established (Quincy, Massachusetts). It also prepared a daily prize draw (another $1,000) for all new loyalty program members who registered between November 24 and 30 using a certain promotional code.

The app's success has encouraged the company to expand its horizons. On the one hand, it is about to begin a pilot program to place orders from cell phonesin some chain stores, and the app is expected to be expanded to more markets outside North America next year.

According to the president of Dunkin’ Brands: “We believe that specific deals are definitely a must-have for the future of these programs. Consumers have responded very well to the location-specific deals available through the mobile app. We will fine tune this strategy as we learn more about the behavior of users of the DD Perks program, which we hope will be an important driver for the brand's long-term growth".

Thanks to this strategy, Dunkin' Donuts already has millions of users on board, and if they can all be pushed to make payments in the outlets, this would demonstrate that the success of Starbucks' app is not mere chance, but proof that combining payment apps and loyalty programs is a key to success for retailers.