Dear Mr. Wheeler & Mr. Ellison. To accomplish both companies' goals of driving foot traffic, I recommend a partnership between Lowe's and Dunkin' Donuts. Given the substantial market share held by both Dunkin' and Lowes and the highly concentrated nature of these markets, forming a partnership is the next logical step toward growth. Strategically placing Dunkin Donuts outlets within Lowes Stores will introduce new clientele, increase sales, and increase foot traffic. One of the main advantages of co-locating Dunkin' within Lowe's stores is the potential to attract new clientele. Dunkin' and Lowes target drastically different audiences. Dunkin Donuts targets young adolescents, students, and people in business between 18 and 65, while Lowes …show more content…
Dunkin' Donuts' business model benefits by exposing its products to Lowe's customers. Contractors, homeowners, and DIY enthusiasts who frequent Lowe's will discover Dunkin' Donuts while shopping. A partnership benefits both parties by expanding both companies' reach while fostering a new loyal customer base that would otherwise have yet to be capitalized on. Moreover, the partnership presents a significant opportunity to increase sales due to increased exposure to new customers. Through this partnership, you can anticipate an increase in impulse purchases from both types of customers. Some shoppers may want a refreshment or snack while they shop, and Dunkin' consumers may browse home improvement goods while waiting for their food. Beyond consumers browsing new products, shoppers spend more money after drinking caffeinated beverages. A study observed that "Shoppers who drank a cup of coffee before roaming retail stores spent about 50% more money and bought nearly 30% more items than shoppers who drank non-caffeinated beverages." This study demonstrates Lowe's potential to increase its average customer spending per visit and sales. Retail expansion within the coffee industry is an overlooked sector of sales and an