- Dunkin' took over social media in 2020, from its collaboration with trendy candle brand Homesick to a drink named after TikTok star Charli D'Amelio.
- Drayton Martin, Dunkin's vice president of brand stewardship, told Business Insider that the chain wants to do things that made people say: "Wow, I didn't expect that from Dunkin'."
- "We have made an extremely focused effort on puncturing perceptions of Dunkin'," Martin said.
- In late October, Dunkin' reported that US sales were up 0.9% in the third quarter. For comparison, Starbucks sales in the US were down 9% in the quarter.
- Visit Business Insider's homepage for more stories.
Who would pay $34 for a candle that smells like a $2 cup of Dunkin' coffee?
A lot of people, Dunkin' discovered in 2019 after releasing a candle collaboration with Homesick. In fact, the candle was so successful that Dunkin' launched a second collaboration with the trendy natural candle brand this fall. Dunkin' superfans have also snatched up Dunkin' scrunchies, mini fridges, and even bedding over the past year.
"One of our aspirational things is to have people see something — whether it's a food product, a merch products, one of the relationship we have — and say to themselves: 'Wow, I didn't expect that from Dunkin'," Drayton Martin, Dunkin's vice president of brand stewardship, told Business Insider.
This year, Dunkin' took over social media by doing the unexpected. On Twitter, Dunkin' merch prompts countless celebratory tweets. Scrolling on TikTok quickly produces videos of star Charli D'Amelio holding her namesake cold brew. New drinks like the Sugarplum Macchiato act as Instagram bait that rivals the ever-viral Starbucks.
The unexpected is paying off. In late October, Dunkin' reported that US sales were up 0.9% in the third quarter. For comparison, Starbucks announced the same day that its sales in the US were down 9% in the quarter.
"Dunkin' has outperformed Starbucks in many ways," industry expert John Gordon said.
"This Charli thing that they have got going — that was brilliant," Gordon added. "Starbucks has just been just very slow to react."
Dropping the 'Donuts'
Dunkin' kicked off a massive rebrand in September 2018, when the chain announced it was dropping "Donuts" from its name. According to Martin, Dunkin' needed to honor its roots while avoiding becoming "encased in amber like a fossil."
Read more: How Dunkin' CEO Dave Hoffmann led the beloved coffee company through a massive rebrand — and now a $11.3 billion acquisition
"We have made an extremely focused effort on puncturing perceptions of Dunkin'," Martin said. "There are people who grew up with Dunkin, but then Dunkin is almost trapped in time. … Our brand has grown up. Our offerings have grown up."
While Dunkin' has expanded — and continues to expand — out of the Northeast, many people still see the chain as a New England brand, according to Martin. The breadth of its menu has also been a point of confusion. Part of the reason for Dunkin's rebrand was to emphasize it sells more than just donuts.
Building out the menu was a first step in changing customers' perceptions. Dunkin' has built up its espresso-based drinks business, previously a category that Starbucks dominated. The chain leaned hard into certain trends, rolling out a line-up of matcha beverages and Beyond Sausage Breakfast Sandwiches. This fall, Dunkin' added an oat milk option, beating Starbucks' planned spring 2021 roll out.
"We're about democratizing trends," Dunkin' CEO David Hoffmann told Business Insider in July 2019.
Menu items and social media are also increasingly linked at Dunkin'. Take two of the chain's most notable launches of 2020: the Sugar Plum Macchiato and The Charli cold brew.
Dunkin' is winning over Gen Z by dominating on TikTok
Starbucks has long been the king of brightly colored, Instagram-ready drinks. Can anyone forget, for example, the days of the Unicorn Frappuccino?
Now, drinks like the purple Sugarplum Macchiato help Dunkin' take a page out of Starbucks' playbook. These beverages essentially provide free advertising, as they beg to be photographed and posted on Instagram.
However, Dunkin's biggest viral menu success is rooted in TikTok.
In September, Dunkin' debuted The Charli, a cold brew drink named after TikTok star Charli D'Amelio. D'Amelio, a long-time Dunkin' fan, promoted the drink to her millions of followers on TikTok. According to UBS, The Charli drove a 57% increase in app downloads compared to the previous 90 days and significantly boosted cold brew sales.
"Certainly, the drink had a lot of popularity with Gen Z, which obviously is super important," Martin said. "You need to continue to bring younger people into the brand family if you want to stay healthy."
"Also, the younger generations are actually bellwethers that then cascade to the loser Gen Xers who are still desperately clinging onto coolness — not that I'm describing myself or anything," Martin added.
The chain's TikTok strategy extends beyond The Charli. In June, the chain had users compete to become the fifth account that Dunkin' would follow back with the "Dunkin' follower campaign," growing its follower count by 37%. Starting this fall, the chain enlisted employees to post TikToks on the job as part of the "crew ambassadors" program.
Dunkin's efforts are paying off in concrete metrics. The brand has 2 million followers on TikTok, more than any other fast-food chain. For comparison, Chipotle has 1.4 million followers, Starbucks has 1.2 million, and McDonald's has roughly 590,000.
Read more: Dunkin's TikTok marketing strategy includes paying employees to post videos at work and it's part of a growing trend
The new and improved Dunkin' comes with an $8.8 billion pricetag
Four years ago, Saturday Night Live ran a sketch that encapsulated Dunkin's reputation problem. In a fake Dunkin' ad, disheveled Massachusetts native Casey Affleck disrupts the coffee shop's attempt at projecting a polished image.
"You want to talk real Dunkin' customers? That's me. I'm like the mayor of Dunkin' right here," Affleck says in a thick Boston accent as he smokes a cigarette half inside the store, half outside.
This was the old Dunkin': lowbrow, slightly grimey, and distinctly Boston-based. Then, we have 2020 Dunkin': TikTok dominance, Instagram-ready drinks, and trendy candles.
Beyond marketing, Dunkin' had the added edge over Starbucks in 2020 simply because it kept its locations open, according to industry expert Gordon.
While Starbucks temporarily shut down all company-owned locations without drive-thrus early in the pandemic, Dunkin' shuttered far fewer stores, with most franchisees emphasizing to-go orders while staying open. This allowed Dunkin's marketing to hit its groove, despite one of the restaurant industry's most destructive years in modern history.
The strategy is already paying out. Earlier in December, Arby's parent company Inspire Brands closed its acquisition of Dunkin' in a $8.8 billion deal. According to Martin, Dunkin's efforts to push the brand in unexpected directions is not over yet.
"It's an ongoing project. As we make more and more inroads, we're learning and then we're expanding our offerings and the way we engage with people," Martin said.
"Dropping 'Donuts' from the name — obviously was like a shot in the air and letting everyone know that Dunkin' is different," Martin added. "And we just keep proving that over and over and over again."
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