The managers at one of the nation’s fastest-growing ice cream chains pride themselves on customers who know exactly what they want sweet-wise when given the tools to make it.
The 1,200-store chain opened its first franchise store 10 years ago and has been gaining momentum ever since.
It plans to open 400 stores this year alone, and expects revenues to hit $425 million, said acting CIO Sally Bell. Most of those franchise openings have come about in the last four years.
But the chain’s approach focuses on selling a series of dishes and taste combinations recommended by the store—combos that change frequently.
Customers can also create their own combinations. For Bell, though, it’s discomforting how little the chain and, for that matter, individual stores, know about customer preferences.
The chain knows how many gallons of ice cream it uses a day, but not how they are delivered—in what flavor combinations and with what toppings.
Knowing which combinations its customers prefer would obviously help the company plan supplies, menus and individualized marketing programs.
But the company only started using POS systems three years ago, and doesn’t have access to as much data as it could wish, Bell said.
Those initial POS units, from Panasonic, were never intended to deliver sophisticated CRM data.
“When we programmed the POS, we didn’t go into the details of the type of [ice cream] creation. We are just saying it is a creation,” Bell said, specifying that the system does record the item’s size, listed as “like it [small]”, “love it [medium]” and “gotta have it [large].”
The current POS will also note the number of mix-ins and toppings which, like the size, can directly impact the price, making the POS have to ask that.
“We are limited in the knowledge of what is being ordered by whom,” she said.
So Bell has ordered three related IT priorities for the chain: major POS upgrades; a new CRM package; and Cold Stone gift cards (and potentially, loyalty cards).
Envision a crowded summer Saturday night, with the line of ice cream aficionados overflowing from the store.
What if customers could wave a loyalty card as they get in line, alerting the staff that there are 26 known strawberry-ice-cream-lovers in line, so somebody had better bring a new container of strawberry out from the back.
Better to know that now than when the customers get to the front of the line.
Or perhaps regional e-mail alerts could be dispatched when certain flavors need to be pushed. A database of customers that understands their flavor and topping preferences could make those e-mail alerts much more effective.
The premium ice cream scoop shop chain is becoming an icily competitive space, with Cold Stone mixing and topping along with Dairy Queen, Marble Slab, Maggie Moo, Haagen Dazs, Ben & Jerry’s and Baskin Robbins.
Those chains have also moved very far away from the romanticized nostalgic mom-and-pop ice cream parlors of the Norman Rockwell mode.
For example, investing legend Warren Buffett’s company, Berkshire Hathaway, owns the 5,700-store Dairy Queen chain.
Ben & Jerry’s 570 scoop shops—not to mention the ice cream in stores—is owned by U.K.-based Unilever, which also owns Breyers.
Haagen Dazs is now owned by Swiss company Nestle, which also owns about 68 percent of Dreyers, which makes Edy’s brand ice cream.
The most complicated ownership is Baskin Robbins’ 4,500 stores. It’s now owned by Dunkin Brands (the Dunkin Donuts people), which itself is a division of the U.K.-based Allied Domecq, a wine and spirits maker. Allied this year was taken over by French company Pernod Ricard.
The mount of ice cream is also growing rapidly, with U.S. ice cream production hitting 1.6 billion gallons last year, translating to about 21.5 quarts per person, according to the U.S. Department of Agriculture. That makes the United States the world’s largest ice cream producer.
In terms of cold cash, the latest figures available (for 2002) put U.S. sales of ice cream and other frozen desserts at $20.5 billion, including $12.5 billion spent on “away from home” purchases, including scoop shops, food service and other retail outlets, according to the International Ice Cream Association.
For the most part, the high-end chains are quite similar, analysts say, in terms of ice cream quality and variety of ice cream, toppings and mix-ins.
From a marketing perspective, that puts a huge amount of competitive pressure on store experience along with whatever kinds of incentives and promotions the chains can whip up to generate loyalty. That’s where innovate technology deployment could play a crucial differentiating role.