By building a complete digital system covering order placement, membership, BI (business intelligence), and Weixin Mini Programs, Tim Hortons (Tims) has been able to continuously transform and improve all aspects of its business, from transactions and marketing to store management. This system has enabled the company to continually increase its revenue while reducing its costs and, at the same time, enhance its brand's resilience in China. Tims also relies on its self-owned sales and marketing channels, including its Mini Program and WeCom communities, to spark interaction, increase engagement, and foster more activity with its members.
Tim Hortons, known as Canada's favorite coffee, is one of the two most valuable coffee chains in the world. It has been ranked as one of the world’s 25 strongest and most valuable restaurant brands by the UK brand evaluation agency, Brand Finance, for several consecutive years.
In 2019, Tims opened its first location in China. With the unique combination of coffee and warm food, proactive and effective localization strategies, and innovative community-focused management, the company quickly expanded its presence throughout the country. To date, Tims has fully established itself in the Chinese market, opening over 600 stores in more than 30 cities across China, including Shanghai, Beijing, Guangzhou, Shenzhen, Chongqing, Chengdu, Nanjing, Hangzhou, Fuzhou, and Zhengzhou, with over 200 stores in Shanghai alone.
With the world gradually returning to normal life post-pandemic, the coffee industry has also returned to its regular fast pace. However, product homogeneity and fierce competition have prompted more and more market players to turn to digital transformation to refine their operations. With this, one of the most important questions has become how to keep up with the demands of young consumers and stay relevant.
With the help of Tencent Smart Retail, Tims continues to reap the benefits of digital operations. Refined operations have enabled the brand to reduce its costs while increasing its efficiency and competitiveness, and they have also made it possible for Tims to win the hearts of consumers, drive new business growth, and achieve breakthroughs in traffic and sales.
Tims opened its first Chinese location in Shanghai in February 2019.
Upon arrival, the company immediately began the first stage of digitalization. It developed its online order center, Mini Program, membership system, and BI (business intelligence), began connecting and visualizing business data, and built its initial infrastructure. To attract its first members, it invited them to place their orders online through the Mini Program to "buy one, get one free" and participate in other new store promotions.
The second phase of Tims digital strategy was to refine its Mini Program and optimize its membership system. More and more promotions were launched in the Mini Program, and the company also began utilizing Weixin channels and communities to reach out to more and more members. As the focus shifted from infrastructure to operation refinement, interaction between Tims and its members also became more frequent, and its commitment to digitalization became more solidified.
By the beginning of 2023, Tims had over 600 stores across China. As it continues to expand, the company has also begun building its own transactional marketing platform for faster response to market trends.
By continuously fortifying its digital infrastructure, Tims has been able to unlock new resources and reduce costs throughout all aspects of its operations, which have made the brand highly resilient and competitive in the Chinese market.
Today’s consumers spend approximately 70-80% of their day online, making it a huge portion of their home and work lives. As more customers transition from in-store shoppers to online members, Tims has been able to bring its consumers closer by offering online promotions and activities they can easily participate in.
In terms of transactions and sales, Tims lets customers place their orders online and pick up their coffee at a nearby store. This makes the entire process more convenient, as customers no longer have to wait near the counter for their coffee, and the overall experience is greatly improved. At the same time, digital systems enable Tims to leverage data from online orders to gain a better understanding of its members, including who they are and what they like. By analyzing big data from across its entire membership base, the company can quickly discover new market trends and make well-calculated product decisions, for example, by quickly launching new low caffeine items in response to growing health awareness.
In addition to gaining new product insights, Tims also utilizes feedback from its members to form new collaborations with other brands. This not only strengthens its relationship with customers but also strengthens its brand network, carving a clearer path for future development of the brand.
Digitalization has allowed Tims to bridge the gap between itself and consumers while also enabling it to provide better, more targeted service. In return, consumers also make more frequent purchases and provide more positive feedback, ultimately leading to wider sources of ever-increasing revenue for the company.
In terms of scalability, Tims relies on systematic digital management to better record, track, and optimize its operations, achieve higher efficiency, and reduce costs. In its physical stores, digital systems are put in place to enable intelligent scheduling of staff and self-checkout for customers. In this way, even as the brand continues to scale and orders continue to increase, labor costs can still be kept under control, enabling Tims to maintain its profitability.
More resources and fewer costs remain extremely important themes for enterprises, even in the wake of the pandemic. For Tims, digital transformation and continuous innovation have been the primary means of realizing these themes. In terms of gathering resources on the transactional marketing side, the brand's focus is being closer to customers, better understanding their needs, providing better service, and generating more revenue; In terms of cost reduction, the focus is using digitalization to improve store management and using intelligence and big data algorithms to refine operations.
From the beginning, Tims made Weixin Mini Programs a top priority in its digitalization journey. For Tims, Mini Programs are not just online stores where customers can save time by placing orders online—they give the brand a way to interact with its members and provide them with benefits and promotions. Mini Programs also act as a service center where the brand can better serve its customers.
Mini Programs also play an important part in the Tims membership system. The Mini Program offers a membership path with different tiers, complete with discounts and other benefits, and allows the brand to even explore new benefits such as achievement badges and no queuing, making it very attractive to new and existing customers. At the same time, the system also gives members a way to personalize their experience at Tims. The company can deliver personalized marketing strategies for different member tags, send different discount packages based on consumption frequency and preferences, respond to user needs, and achieve overall better marketing results.
Today, Tims has over 11 million patrons. This huge amount of traffic to its owned sales and marketing channels has become an important driving force for the brand, especially in the way it drives interest in new products.
In the past, Tims was primarily focused on promoting new products only on the day the products were launched. Now, the company uses Mini Programs to extend the promotional period for new products, with promotions starting three days before the new product launch. This warm-up period for new products gives ample time for word of mouth to spread among customers. Buy-one-get-one-free coupons are delivered to members, which not only serves as an announcement for a new product but also encourages members to bring their friends to try it out. Resources that were originally used for ad placement to promote new products are transformed into member benefits, stimulating more interest and interaction between consumers.
On the third day of the new product launch, the brand also launches additional coupons, such as a buy-2-get-20%-off discount, which further encourages customers to buy the product again. These coupons can be sent out in Tims community groups as one-time promotions or can become regular new product benefits for community members. Some time after the new product has been available, the brand also sends 50% off coupons to regular customers who still haven’t tried the product, further increasing the likelihood that everyone can experience Tims’ new products.
With a focus on continuous development of new products, the Tims Mini Program not only has a significant effect on attracting interest but also on increasing the penetration rate of new products, making it much more likely that new products will gain widespread popularity. In terms of cost, the company saves money that was originally used for media placement and instead translates it into benefits for its members, ultimately saving costs while greatly increasing brand loyalty.
Tims has been able to use its owned sales channels to accumulate a huge pool of traffic in which interaction and fission among members are highly active, making it an invaluable asset for the company.
As owned sales channels become more refined in their operations, the company's focus gradually shifts more towards its communities. And with a membership base in the tens of millions, engaging with members and increasing activity becomes a big challenge.
To this end, WeCom has become an indispensable tool for Tims. Whether it’s sending one-to-one messages or pushing messages to communities, WeCom enables Tims to quickly engage with users and increase activity. Data shows that Tims’ community members make purchases 1.5 times as frequently as non-community members. This increased interest has contributed to a huge increase in overall revenue for Tims.
The younger members that are prevalent in Tims communities are not only eager to make their voices heard but are also much more welcoming of new tools and new activities within the community. WeCom features such as polling and referrals have played a big role in increasing interaction among users.
As for the future of its owned channels, Tims plans to continue optimizing its operations, utilizing its member system to drive more sales, concentrating resources to develop its marketing platform, and building better systems to serve customers. It will continue iterating its membership system to make it a warmer space for the brand and its members to interact with each other, with more focus on brand focus, more targeted benefits for members, and more value for everyone.