Why leave the house for your Boston Kreme doughnut (or three) along with a large iced coffee (light and sweet), when Dunkin' Brands' (NASDAQ:DNKN) Dunkin' Donuts may soon bring it directly to your home or business?
What: The New England-based coffee and doughnuts chain plans to join its rival Starbucks in bringing its products to wherever customers happen to be. Starbucks has been testing delivery via its ordering app in the Pacific Northwest, according to CNN Money, and Dunkin' has been doing the same in undisclosed markets. Dunkin' Brands CEO Nigel Travis appeared on CNBC's On The Money yesterday to discuss the idea that digging into a mixed dozen or a Box O' Joe might soon be possible with little more effort than typing in a few keystrokes.
"Delivery is clearly a big opportunity," Travis told CNBC. "We're now developing mobile ordering. We're doing a private test. We'll move to a more public test later this year," he said. "We'll probably launch mobile ordering sometime next year."
Now what: While Travis sees a market for delivery to increase the company's business, he does not expect it to be rolled out quickly to the brand's more than 8,000 U.S. stores.
"The key thing is we have to make sure we can operationalize all these procedures. That's why I've slowed up mobile ordering to make sure it's operationally simple at the store level."
Travis was also scarce with the details for the service, not stating what it might cost and whether there would be a minimum order.
So what: Delivery may well be the next frontier for fast-food and fast-casual chains. McDonald's and Chipotle are also testing delivery models in limited markets. Dunkin' Donuts may be a perfect fit for delivery because its product lends itself to larger orders, especially in an office setting. It's possible that the so-called "coffee run" could turn into a delivery that's facilitated by the company's app.
"The trend in this country is convenience. So I think delivery plays very strongly," Travis said. "I think the next few years you're going to see us get more and more into delivery."
If the company manages the process well, the addition of delivery orders (and subtraction of some in-store visits) may actually improve its workflow. Every person who regularly visits "Dunkies" has experienced the hassle of being behind the person with a giant list of coffees, doughnuts, and breakfast sandwiches to bring back to the office. You may just want a chocolate glazed and a medium coffee, but the trip takes 20 minutes because someone else is ordering for an army.
Delivery could take some of those big orders out of the normal production flow, leading to a better experience for in-store customers. It's also possible that Dunkin' Donuts could ultimately use delivery and technology to help mitigate its biggest problem -- slower sales in the afternoon. Something as simple as offering a discount or free delivery to customers willing to place an order after 2 p.m. could be a game changer.
It's very early in the process, but while America may run on Dunkin', it may soon no longer have to even walk from the car (or reach out to the drive-through) to get it.
Daniel Kline owns shares of Apple. There are at least eight Dunkin' Donuts within an easy drive of his house. The Motley Fool recommends Apple, Chipotle Mexican Grill, and Starbucks. The Motley Fool owns shares of Apple, Chipotle Mexican Grill, and Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.