As restaurants compete to leverage new digital capabilities as quickly and effectively as possible, Dunkin is leveraging artificial intelligence (AI) to optimize store performance on a per-unit basis.
On Tuesday (June 6), marketing technology firm HubKonnect, which leverages local data to improve store performance based on factors specific to each location, announced a partnership with the quick-service restaurant (QSR) company. In an interview with PYMNTS,Michael Kochco-founder and CEO of the tech company, spoke about the demand for this kind of local insights.
Let’s say a Dunkin is in a college and the age demographic is 18 to 22, Koch said. Our technology then recognizes this and offers more data-driven digital solutions, as opposed to, say, a location in Florida in an older retirement community, where there may be more [paper] handouts. Based on our data, we know there’s a technical threshold within age groups, different comfort, so why would you have mobile offerings with an older demographic that won’t download the app?
While this may be a fairly broad example, technology can provide insights into the specific needs of a particular location that are much more granular. For example, consumer ordering behaviors can be influenced by other demographic considerations, how far they are from their store, how they are getting to the location, and more.
Raising the bar
Dunkins moves to leverage HubKonnects technology, which is also used by other major QSR brands including McDonalds, Chick-fil-A and Bojangles, and comes as the competitive landscape for marketing evolves to require this kind of specificity.
With the retail industry aspect, national advertising was the craze, regional advertising, but what we’ve found is that the trend is really to unity, to be able to have that level of specificity in that data, he said Koch.
Certainly, restaurants are trying to get smarter, adapting new technologies to keep up with others. According to the data cited in Inflation makes technology stakes for restaurantsthe March edition of the Money Mobility Tracker, a PYMNTS andIngo Moneycollaboration, three-quarters of restaurants plan to adopt new technologies this year.
Also, most consumers are looking for these kinds of technology upgrades. Additional research highlighted in the Tracker reveals that 70% of restaurant patrons want technologies like custom menus built into the drive-thru.
Also, aPYMNTS surveyof nearly 2,000 US consumers found that 16% of consumers now order food primarily through restaurant direct ordering channels such as their websites or apps, and 8% order food primarily through third-party aggregators.
We see a lot of these drive-thru trends increasing, mobile app usage is increasing, Koch said. These are the areas where you see the evolution, the modernization of the QSR space.
In fact, restaurants are increasingly turning to AI and machine learning to automate the entire experience. For example, this month, Wendys is launching its owntest of Google Clouds AI technology at the drive-thru, fueling conversational commerce that leverages the tech company’s large language models (LLMs).
Baby it’s cold outside
In fact, artificial intelligence can offer QSRs insight into how many different factors influence consumer habits not only the composition of the population in a given area, but also external factors that influence their day-to-day behaviors.
For example, when it’s cold outside, Koch noted, the mix of a combined Dunkin and Baskin Robbins location can be shifted toward Dunkin’s, but as the weather warms up, more consumers are opting for ice cream. Or, for example, in a location near an NFL stadium, customers might be vastly different on a game day than on other days, demanding different marketing tactics based on the events on the schedule.
If there will be a heat wave, what if there is a special or digital offer that can be sent to, Buy this, get this? Koch said. So, it’s really responsive.
From end to end
Given the demand among catering operators for simple,unifiedsolutions, HubKonnect noted that to be most useful, the company must not only deliver the insights into the data, but also apply those findings to the marketing assets themselves, among other implementations.
We are not just a technology company. With Dunkin, we manage the entire local store marketing ecosystem,” Koch said.
He explained that studying the company develops resources and communicates with franchisees, as well as working with vendors, making sure restaurants have the right partners, the right turnaround, the right process.
Looking ahead to the future of the industry, Koch predicts that this kind of place-to-place specificity will soon become a stake, as marketing becomes increasingly granular.
QSR’s future is in unity, said Koch. Then, looking at each place as a single ecosystem to guide them [pricing and marketing] decisions. That’s what our platform does, and we’ve become the #1 place for local store marketing for Dunkin and our other customers.
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