Jim Morgan, Executive Chairman for Krispy Kreme Doughnuts, said during a June 2 conference call to announce the company’s first-quarter financial results that driving deeper customer engagement is critical to future success.
“We fully understand that achieving organic and consistent same-store sales growth is predicated on providing our guests with an outstanding product and hospitality experience with every shop visit,” Morgan said. “Our focus is therefore on driving more everyday use occasions by giving customers exactly what they are looking for: hot, Original Glazed and other delicious doughnuts, a variety of great hot and cold coffees and other specialty beverages, and a friendly and welcoming interaction with the staff in our shops. Encouraging more everyday occasions requires that we keep customers constantly engaged with our brand, we have therefore been growing our digital presence as a key component in facilitating that everyday connection.”
Morgan said that the company has partnered with a global marketing agency, VML, to enhance digital customer experiences. The agency has a “demonstrated ability to successfully execute unique and memorable campaigns on a global scale. We think enhancing our global presence through new and existing digital, social, and interactive media channels is critical to worldwide customer engagement, and will help keep Krispy Kreme top of mind.”
Krispy Kreme saw its systemwide domestic same-store sales rise 2.3% in the quarter, but revenue only slightly grew less than 1%. Store count increased 3.3%.
“Key to building and maintaining long-term top of mind consumer awareness is building greater connectivity to Krispy Kreme by making our products more convenient and available in a variety of venues outside our shops,” Morgan said.
Examples of this are: ready-to-drink bottled coffees, bagged coffee, bagged ground coffee, and by the end of the year, K-Cup portion packs through the company’s partnership with Keurig Green Mountain.
“We believe that by making more of our products accessible to customers outside of our shops, and in channels where they customarily buy coffee, we can
build trial usage and product affinity that could also translate into higher coffee and same-store sales at our domestic shops,” Morgan explained. “The ready-to-drink, bagged and K-Cup products represent our initial entries into brand licensing. We believe there are many opportunities to expand and capitalize on our Krispy Kreme brand awareness and reputation through thoughtful arrangements with first-class licensing partners. We are planning additional such arrangements in the coming quarters and years.”
Morgan said the company is focusing on the quality of its doughnuts and the quality of its in-store experience.
“I believe with all my heart we will build a reputation as the place that wows people with the experience over the coming years,” he said. “And that’s exciting because it fits our brand perfectly. We are, through that, engaging with customers in new and creative ways through the digital media. I think the recent agency change that we’ve made is exciting. I think our guests and our customers and our friends are going to feel more connected to our brand, and more encouraged to make Krispy Kreme a part of their everyday lives thanever before. The long-term opportunities that we have from the ongoing global unit growth, from menu development, which is in very early stage of the Krispy Kreme. From increased beverage sales, where we are woefully behind, and have not made the progress we should the last couple years.”
Morgan said that the key to building long-term, top-of-mind consumer awareness is by building greater connectivity with customers and making the company’s products more convenient and available outside of its stores.