Cinnabon seeks customer insights to boost stickiness
The Bakery chain is piloting iPads, Apple Pay and cloud software in several stores, as part of a digital refresh to bolster the Focus Brands property's fortunes. The systems will funnel data into a data warehouse, ostensibly to generate consumer insights. But the company president says questions loom.
Sticky bun purveyor Cinnabon is baking a batch of digital capabilities as part of a technology overhaul designed to spur sales. The property of Focus Brands, which also owns Moe’s Southwest Grill, Schlotsky’s, and Carvel, is testing a new sales system that incorporates iPads, Apple Pay and cloud services. The company plans to analyze the sales data to generate insights on consumer preferences.
“Veteran [store] operators love it,” says Joe Guith, president of Cinnabon. “We love it because it engages team members and doesn’t take much training.”
Rising to popularity thanks to its sugary baked goods in the 1980s and 1990s, Cinnabon lost ground as calorie-conscious consumers embraced the Atkins diet, eschewing the large cinnamon rolls for smaller, less guilt-inducing snacks. But former Cinnabon President Kat Cole, now Group President for Focus Brands, reenergized the brand, using digital marketing and social media; partnerships with Burger King and Taco Bell; and new, bite-sized baked goods, to build a $1 billion business. Revamping the stores’ technology infrastructure is the next leg of the comeback journey.
No, seriously: ‘Our POS system runs on an iPad.’
iPads have added a new wrinkle to mobile computing in the nearly six years since Apple introduced them. Today, several industries, from airlines to retailers to restaurants are using them (or other tablets) to engage with consumers and train employees. More than just viable replacements for aging transactional systems, iPads are table stakes to attract millennial employees accustomed to using touch-enabled interfaces, Guith says. To lure new workers, companies need to provide the most modern tools, goes the popular thinking.
Cinnabon is phasing out a hodgepodge of POS and other payment systems in favor of iPad-based units from Revel Systems that support Apple Pay and are paired with VeriFone card readers that honor EMV standards for secure payments. It’s using a customized version of Revel’s quick service solution, including a wireless router, cash drawer, printer and stand. Revel’s cloud back-end enables it to push out updates to Cinnabon’s bakeries. The Revel systems are currently running in 15 locations, though Cinnabon plans to expand that number to at least 80 bakeries by the end of the first quarter.
The Revel system funnels sales information to its cloud system, which analyzes the data and generates reports to help Cinnabon align production with the cost of labor and sales. Cinnabon hopes to better understand when increases in sales tend to occur, allowing it to predict how much product they need to make. It would also help Cinnabon’s marketing team learn such useful data points as the sales impact of, for example, a limited-time offer.
Focus Brands’ data plans are more ambitious for 2016. The company plans to tuck data from its properties’ transaction systems into a data warehouse system, comprised of Microsoft’s SQL Server and Power Business Intelligence applications, running on Microsoft’s Azure cloud platform, says Focus Brands CIO Michael Verdesca. Focus Brands’ data scientist will generate consumer insights from the transactional data. They’re also trying to correlate the impact of adverse weather and social media sentiment to brand sales.
“My team works very closely with [the data scientists] to figure out how we can get them the data and the tools so they can figure out what’s going on with the business and learn what we can do with all of this data,” Verdesca says. He says data-driven insights will help the company make better connections with consumers.
Cinnabon ponders loyalty program with iPads, Apple Pay
Just how valuable this data is unclear, particularly for Cinnabon, which unlike Starbucks does not boast many customers who return at a high frequency. Guith says the company is considering ways in which a loyalty program could work inside malls. But it will require some creativity beyond the standard retail store loyalty practices.
It doesn’t make sense for Cinnabon to introduce an application to incentivize customers to keep coming back, Guith says. “Apps are like cards in your wallet — you only want so many.” Having mall-based locations also rules out beacon-based technologies, as too many like offers in close proximity can drain its battery in quick order. He says a targeted offer, based on a customer’s purchase history and prompted by a Cinnabon cashier at the point of sale, makes more sense to foster loyalty.
Guith says he suspects that implementing an Apple ecosystem, including iPads and Apple Pay, which allows contactless payments via iPhones, putting the company in a good technical position to build such an ecosystem. In fact, he met with Apple and Revel last week to discuss such a solution. “We know we need to do it … but how do we do it?” Guith says, of the loyalty system.