Will Speed Win?
Dunkin's strategy? Be faster and cheaper than Starbucks.
If you're going to take on Starbucks, the leviathan of the coffee business, you need an edge. And Dunkin' Donuts, the 54-year-old New England chain famous for its Boston Creme doughnuts and award-winning beans, thinks it's found the key to being a contender: speed and price. So this, then, is the new management team's new strategy: be the faster, cheaper, user-friendlier alternative to Starbucks -- the average Joe's average joe.
In an unofficial 'speed and price' test, the author, Linda Tischler, visited a Dunkin’ Donuts in the Tribeca area and received her ‘small, skim milk, vanilla latte’ in 2 minutes, 4 seconds for a price of $2.16. And at Starbucks, Linda’s ‘tall non-fat, vanilla latte’ was prepared in 2 minutes, 55 seconds and it cost $3.69.
Clearly, Dunkin' Donuts beats Starbucks on speed and price. And that is exactly why Dunkin' is betting younger consumers, who have grown up drinking Starbucks, will eventually choose waiting a little over 2 minutes and paying $2.16 for their latte.
Will Dunkin' Donuts' speed and price strategy work? I don’t think so. Taste will always trump speed and price.
And Starbucks makes a better cup of coffee than does Dunkin’. Just as Dunkin’ makes a better donut than does Starbucks.
Speed and price is an important aspect to a great customer experience but is it more important than a clean store? A friendly staff? Great coffee taste/flavor/quality?
Be it a glazed donut or a cup of coffee, I’ll gladly pay a little extra for something that is higher-quality, has more taste and flavor, and is served by a friendly employee in a clean store. How about you?