Why Tim Hortons introduced a mobile app and loyalty cards

Digital strategy and cash-back cards

Along with introducing new products like those we discussed in the previous part of this series, Tim Hortons (THI) is also testing different revenue channels and payment methods.

Digital strategy

Most major restaurant chains have joined the digital bandwagon.

In Market Realist’s Burger King (BKW) series and Yum! Brands (YUM) series, we explained that both companies will launch mobile applications for their customers.

Similarly, Tim Hortons (THI) launched a new mobile application. Restaurants across North America have barcode scanners so customers can pay via their smartphones by scanning. Starbucks (SBUX) also allows customers to pay using smartphones. The company also claims that it’s the first in the industry to launch a payment system on all four mobile platforms—iOS, Android, Windows, and Blackberry.

Cash-back cards

Tim Hortons launched its Double Double co-branded credit card Canada-wide in partnership with the Canadian Imperial Bank of Commerce, or CIBC, and Visa.

This card is a two-in-one payment card that lets a customer make a payment for a purchase and earn 1% Tim Cash on every purchase. Tim Cash will be redeemable for purchases at Tim Hortons. So, for example, a $1,000 purchase on this credit card will earn $10 cash back (or Tim Cash) that can be used at Tim Hortons to make purchases, according to calculations provided by CIBC’s website.

With these two initiatives, Tim Hortons hopes to speed up service and improve customer experience. So, together, all these initiatives should improve sales. That’s what we’ll discuss further in the next part of this series.

To get exposure to the restaurants we discussed in this article, you may consider exchange-traded funds (or ETFs) like the Consumer Discretionary Select Sector SPDR Fund (XLY).