Along with introducing new products, Tim Hortons (THI) is also testing various digital strategies. THI completed 95% of its in-restaurant engagement program. The company is also expanding its mobile app. The mobile app will be faster. It will offer a variety of services.
Cash back cards
During the quarter, THI’s Double Double co-branded initiative was recognized by the Canadian payment industry—according to the company. THI launched its Double Double co-branded credit card in Canada. The card is in partnership with the Canadian Imperial Bank of Commerce (or CIBC) and Visa.
The card is a two-in-one payment card. It allows a customer to pay for purchases and earn 1% Tim Cash for every purchase. Tim Cash is redeemable for purchases at THI restaurants. For example, a $1,000 purchase on a credit card will earn $10 cash back. The $10 can be used to make purchases at THI, according to calculations provided by the CIBC website.
THI launched a new mobile application. Restaurants across North America have bar code scanners. Customers can use the TimmyMe app to pay for their orders. They scan the bar code on their smartphones. THI also claims that it’s the first company in the industry to launch a payment system on all four mobile platforms—iOS, Android, Windows, and Blackberry.
In the US, Starbucks (SBUX) had five million mobile applications in 2014. Dunkin’ Donuts (DNKN) is also actively pushing discounts through its app. For some restaurants—like Domino’s (DPZ)—digital revenues were in the mid-40s in 3Q14.
To get exposure to multiple restaurants stated in this part of the series, an investor can consider exchange-traded funds (or ETFs) like the Consumer Discretionary Select Sector SPDR Fund (XLY).
Revenue also grows when a restaurant adds new units and locations. We’ll discuss these initiatives in the next part of this series.