Todd Hoffman, Krispy Kreme

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The iconic doughnut chain Krispy Kreme has something of a cult status, with people flocking to their stores to get a fresh, warm, melt-in-your-mouth yeast doughnut.

There are Krispy Kreme stands and small shops, but a real Krispy Kreme store - the kind that gets people lining up - has the whole production line in view of customers, and shows the glazed doughnuts coming out of the fryer. It is experiential in its own way.

But the chain, based in North Carolina, wanted to really amplify the brand and experience for its new flagship store in New York, in Times Square. It opened recently, and it may be the most ambitious, experience-driven QSR operation on the planet.

There are giant LED visuals outside, 'cuz its Time Square. But inside, there are stacked video walls for branding and promotion, digital menu displays, interactive tables, and a scheduled projection-mapping show called Doughnut Theater.

I spoke with Todd Hoffman, the digital lead on the 4,500 square foot flagship store.

TRANSCRIPT

Todd. Thanks for joining me. Your company, Krispy Kreme recently launched something in New York City in Times Square. Can you tell me what that experience is all about and why it happened? 

Todd Hoffman: Sure. It's an opportunity for an iconic brand to make a big statement out there, Times Square is kind of a crossroads of the world, with a great place to plant a flag, I guess we're in 32 countries with about 1400 shops and and it was time to put a big stick in the ground and say something major for the brand.

We do plan a big rollout starting in 2021, and also we're coming to New York in a big way. So times square just made sense. 

New York is the home of the, not the home, but there's a lot of Dunkin donuts there and a few Tim Hortons. Krispy Kreme wasn't really present in the market? 

Todd Hoffman: We had a shop in Penn station and years ago we had more shops, but we decided strategically that this was where we wanted to expand. And, this year we rolled out four shops, even before Time Square. We've got a couple more coming at the end of the year and then entering into Dwayne Reed, the world to expand our reach even further.

This one in Times Square, it's the whole nine yards where you're doing all the production right there and people can walk in and see what's going on in the whole theater piece of it? 

Todd Hoffman: Absolutely. It’s 4,500 square feet. So it's a big shop for us. We make donuts 24/7. So that's why you have a hot light that's always on top of the roof. 

And these are not regular donuts. These are the “melt in your mouth” ones? 

Todd Hoffman: Yeah, we call them OGs (Original Glazed) but they're yeast doughnuts that take an hour to make from beginning to end, and we have a machine that can do 270 dozens an hour.

So this location is filled with technology, inside and out. You see this big LED screen as you're approaching it. Of course, it's one of the gazillion LED screens in Times Square, but it walked through everything that was done and the thinking behind it? 

Todd Hoffman: Sure. Sight lines were huge. We're at 48th & Broadway, and the goal is to be seen from 40th street all the way up to 55th. That's where we have the world's largest hotline on the roof, 15 feet, about 8,000 pounds that will be lit and truly you can see it from an even longer distance. We're using lights that are typically used on airport runways so that's one of the big pieces. We have a wraparound billboard, that's 110x35 feet. And then under that we have a ribbon of LED screens where basically you can see donuts just like they're on their conveyor, scrolling, and we could also put any kind of other messaging.

Trying to hit it hard from a distance. Everything we did, we wanted to stand out of the crowd, everybody wants to stand up the crowd, But, I think, I think we did, especially with something as simple as our big red hotline, just rotating slowly. With the pandemic that became somewhat of a beacon of hope and optimism. I mean, who doesn't like donuts? 

And even the opening of shops throughout the year, while other people might've been closing shops, and contracting, we've gone full speed ahead. 

And I believe this store was originally going to open earlier in the year, but then, New York kind of went into lockdown and that delayed it a little bit?

Todd Hoffman: It did, but, mid-July, you know, we're right in Times Square with 10% of its normal traffic, the decision was made that it was important for us internally, and we felt in New York externally to stay on track and so we opened in September. And, by the time we opened, let's say Times Square was back 30 to 40% of its average traffic, but we still hit our records anyway. Word got out. 

So when you say records, do you mean that in terms of record sales, foot traffic? 

Todd Hoffman: Both. For the opening day, we hit records and then for the opening week, also records. We opened on Tuesday always and then by Saturday, the word had gotten out to the suburbs into New Jersey and we had a big day on Tuesday, but even bigger days on Saturday and then Sunday.

And you kinda need sales records there because the cost of rent in a Times Square area is a couple of bucks? 

Todd Hoffman: Yeah. 

Not like being out in the suburbs. 

Todd Hoffman: No, and you know, profit is always an incentive, but making a big statement in Times Square that becomes our marker, that we've returned to New York.

We are in Harlem, where in the Bronx. We're down in the Financial district and we're going to open up shops in Brooklyn and the upper West side. 

If you're in Brooklyn, Williamsburg, you’ll have to be artisanal. (Laughter)

Todd Hoffman: Well, we stick to our roots. We did introduce our first, let's say $10 donut, but a big Apple donut, which is our nod to New York, comes in a beautiful box with candy Apple coating. And, it's a donut that we were taking a big risk on, but we've sold hundreds and hundreds on days. You know big risk, beautiful products but it seems to have resonated with locals. We thought tourists would buy it, but there are no tourists.

So locals seem to gravitate. 

Yeah, they take it with them. And while, I guess they're not traveling either and nobody is? 

At some point that'll all change I'm sure. So outside, the big LED displays it's as much a branding statement as it is something that's going to generate foot traffic.

Obviously people are being attracted and when they walk inside, what do they see? 

Todd Hoffman: That's where all of our, I want to say razzle dazzle is, but that's where we've really turned up the heat with digital experiences and in the pandemic where you're not so able to have a full house, or give out samples, or really have the energy that a room full of people have, digital served an even greater purpose.

When you walk in, we've got two video columns facing opposite directions. So you start to see one that's a 53-55 inch screen stacked on each other. So you can see from the door, the pathway leads right to our donut theater, where we make the donuts march down the line. So the pathway was right to the donuts and that's where we took the concept of donut theater and Bravo media, the team, to them, it was obvious that we were on Broadway, we should put out a Broadway show. Initially we were just gonna do some corporate information on the back wall and simple projection, but David really challenged us and we've got four projectors plus a camera that helps us track individual donuts as they march down the line, and that's all, spectacular visuals for people to get their appetite. But, every 12 minutes, we have a show that's about 35 seconds long from the five shows that Bravo created.

And this is on the white tile, subway tile wall beyond the Conveyor that the donuts are moving along, right? And the workers are on the other side of that? 

Todd Hoffman: Yeah, we didn't want it to take people's mind away from the donuts, which is why we only show it every 12 minutes and have these very short, spectacular shows, no words. It's really just spectacular entertainment and it has brought lots of energy to the room, to the point where there's a button in the back where you can advance these shows and when we feel a low energy in the room, boom, they kinda fire up one of the “Takeover” and it's projection on the back wall. They mapped to each individual tile, things that I didn't think somebody could do and then based on mapping to the tiles, all the different shows, you feel like, the tiles are coming off, the wall or sprinkles are coming down out of this ceiling, and then, there's another projector that projects onto our Donut glazed waterfall. And normally in our shops, it's about three inches tall here, it's three feet and, just to bring the focus on the original glaze, and then there's one that happens serendipitously where we've got sprinkles on the back wall and it looks beautiful and then one day the team members just started to poke at the sprinkles as they were exploding on the back wall and it looks like they're playing a video game with their hands, and when that takeover comes on, the donut maker stop what they're doing, they turn around and they start popping up a wall.

That has become a really spectacular show that says a lot about, I think the brand, cause we were loose enough to let it go, crazy enough to put all this stuff into our donut theater and then, let our team members, start to really interact with it. 

Is that part of the team member job description that you're required to do this when this particular show comes on or did that just organically happen? 

Todd Hoffman: It organically happened, but now we do require you do it. If you fear the first tone, then, somebody might come off the floor and one of the donut makers in uniform, and they love it and it's as if they're competing, how many sprinkles you're gonna explode in the course of 35 seconds? 

It’s a break in what they're normally doing. 

Todd Hoffman: Yeah. So that's our lead in, and when we first designed the shop, and being Times Square and being Krispy Kreme, we expected hour long lines, but the pandemic has changed that where we're only at our 25% capacity.

So we have this donut theater that people can see what their appetite, and then at the end of it, they're facing that digital column that kinda shows images of donuts, dozens of donuts, coffee, lattes, trying to help them think about what they're about to order before they hit any one of our five display cases and that's what they're there for. That's where the fun starts, figuring out how to fill the box with your favorite donuts. 

You run all the digital for Krispy Kreme, right? 

Todd Hoffman: I'm the digital lead. My day job is menu boards. That's what I signed up for. And then, what made it the best job in America was being able to do Times Square in the past nine months. Yep. 

When the ideation process was happening for this Times Square store and started floating concepts like the donut theater, I assume you had to sell that up to your managers and the executive team.

Did they go, “Hell yeah!” or did they look at your cross eyed, “You want to do what?” 

Todd Hoffman: I thought when we decided not to put messaging on the back wall, executive leadership would see it as a missed opportunity. But our COO, who really is the one who let Bravo do their stuff, which was a pretty amazing match. When he showed it to the executive team, our Head of operations, our president, they just loved it. 

Krispy Kreme as a whole, it's a very low key brand. We let our product say everything that it needs to say. We don't have an ad budget, we change up the donuts a lot, but it's really word of mouth. So we don't brag and this was a way for us to be on brand, and just entertain and make it a happy place. Where I thought it was crazy, cause I'm new to the brand, I grew up in the Northeast and really was only introduced to it when I started with Krispy Kreme. 

They were true to form, and it went over, I'd say very well across the executive team and they let go and we got to execute it.

Are digital menu boards standard to a Krispy Kreme store? 

Todd Hoffman: They are being introduced in every new store and we're testing in remodels. So eventually all the remodels will have them. The delicate balance is, we don't want people to see technology. The name of the game is, they see what they need to see, they get the information they want. We've met their appetite with some animation, but we really don't want them to feel like they're looking at TV screens, so we've stepped delicately. 

I'd say we have 15 shops that now have digital menu boards and next year we'll do a big expansion, but Times Square was a deviation. It was a project and an aspiration, all its own. 

You talked about rollout. Is this a concept that's going to go elsewhere, like the Times Square donut theatre thing? 

Todd Hoffman: It may, but there may be one other location in the US where we go all in the way we did in New York. You might guess where that is. There are other places where we have a strong presence, England, Australia, Mexico, that may merit this kind of flagship shop. 

Yeah, you could do Lester square if you ever went to Dubai, Tokyo, places like that. I would imagine, you're not saying it, but referencing Las Vegas would be the one that would make the most sense.

Todd Hoffman: Further South, maybe it's Disney territory or such. We’ll see. (Laughter)

The only one I've seen in Las Vegas was in, the one which looks like a castle and all that. 

Todd Hoffman: I think we have a presence out there, but now it's where tourists from around the world congregate, and I was there to have fun family oriented. 

So with your standard, digital menu boards, have you had any sense of what they do? Do they make a difference operationally or in terms of sales or is it just a more efficient way of doing things? 

Todd Hoffman: I'd say the pandemic screwed this up because we can't really comp stores.

We've been opening new shops so that we can comp from the year before. And then the few remodels we did, we only had a couple of months to look at, but we are definitely thinking that it's driving drinks, grabbing beverage attachment, and the goal is maybe a higher average check or more dozens.

But we believe in the concept that it is having impact, and the drive through as well. So definitely, our belief that it's worth the investment is growing, but maybe we need more months and we need more comping to confirm that.

You sent me a list of all the various components involved and there's a lot of moving parts and a lot of people involved. How did all this get pulled together? Cause I'm looking at it like a dozen vendors or something like that? 

Todd Hoffman: Yeah. You know, it started with our design team working with an architect, who are the best of the best. They set the stage and put a lot of this activity in there, not knowing how to do it. I don't think they have much experience doing it, but they could envision what could be done with the digital columns or projecting and the donut theater.

They helped us take our icons and then the icons within an iconic brand, the hotline, the donut box, the waterfall, the donut line and build on them to the point where the whole place seemed to be a theater. So they set the stage. Then we had a major creative shop come in, partnered with a technology lead, which was Electro Sonic and they took the first stab at how we fill it in, with kind of interactive tables and projection during the theater and where the menu boards might go and digital columns, but then we took it and we just dished it out to specialists in each area. 

We used Stata Cash for menu boards. I don't think any other company could have done what we did with these menu boards or any other platform. We've got three layers of imagery that's on there. We've got an animation scrolling animation in the middle board. There's three boards together. We've got your basic, DOS connected menu board items. And then every 30 seconds we have these takeovers that wash across the three screens and it took hours and days for us to, I think we pushed their platform, we pushed the media players that we were using. We pushed their creativity, but, in time we were able to kinda get what we wanted because visually it seems simple, but executionally, it was a really big challenge.

So, kudos to those guys for sticking in there and giving us the vision that we wanted with the menu boards. 

And Strata Cash at least would drive through with some of their clients, they're doing things like AI driven, suggestive selling and menu optimization. Are you guys looking at that or doing it? 

Todd Hoffman: We will be. They are our shop of record, so that's the platform we're going forward with. You know, a lot based on how they presented, we looked at nine different options for menu boards this year, Strata Cash came out on top, partly due to our aspirations with drive-thru. We think we can make more money through drive-thru or have a greater impact digitally through drive-thru.

Then we can go inside the shop. So their expertise in that area and ability to personalize. Everybody had some angle on personalized when they're pitching us, reading license plates, geo-fencing, what have you, but, I'd say Strata Cash their work from McDonald's and others, gives the comfort level that they were the ones to go with for the long haul.

So we've probably done a few shops with them, including Times Square. 

I suspect there's a few vendors who come in and say, “yeah, we can do all that”, but when you push them on it, that has to do with whether they've actually ever done it, it's a different story. 

Todd Hoffman: Yeah, there are some great outfits out there. The surprise to me, I don't know if you stay on a screen on a radio call, it's one of the few times where I thought the best of class was going to be out of our budget. And then when we looked at it, they were right there. So they were affordable and impressive, and continue to impress, but this isn't an ad for Strata Cash.

Yeah, they've done well. The idea of this store, obviously I haven't been there in six or seven months. I wonder about the sensory overload element of it. You've got audio, you've got the theater, you've got the LED displays. You've got all this stuff going on. Is there a balance you have to achieve so that it doesn't become overpowering to people when they walk in there?

Or do you just see and know, “That’s okay, I'm going into an attraction.” 

Todd Hoffman: It sounds like you were listening in on our meetings because of some of our great concerns leading up to opening. We had to get the sound levelled for background music and then, with the donut theater, the light, there's a light show and sound had to rise, but it couldn't rise so far that people couldn't talk so there's a lot of nuances, a lot of, I'd say over the next month, we're going to be doing some fine tuning, but I'm happy to say when we opened, we were pretty close to, in our mind perfect on the balance, bu, getting team member input, getting guests input is critical.

So when we're fine tuned in 30 days, we'll be able to do our best to make it work, but I don't think there's a feeling that we're over the top, yeah. 

Well, you are in Times Square, where everything else is. (Laughter)

Todd Hoffman: Yeah, there's a lot of leeway and so the only place we shouted was outside, that's where it's fair game.

And if you do shout, you know, you don't get heard. So we've tried to whisper with things like the hotline, going back in time, it looks like it's been there since the 1950s, even though we just fired it up last Tuesday, 

What's been the response of people coming in? 

Todd Hoffman: I have been there for the last 10 days and I would stop people in Times Square when I saw them sitting at a table, enjoying the donuts and they say they've been waiting for Krispy Kreme to arrive. We got a thousand pieces of media before we even opened, billions of impressions, so there was a lot of buildup, and a lot of anticipation and everybody I talked to, which are several dozens, seemed to be happy with what they saw.

Well, if they've ever had a Krispy Kreme donut, of course they're happy.

Todd Hoffman: Yeah. And it all comes down to this silly little, original glazed donut that's still warm in your hands. Once you've had one, you can't forget it. 

So before we returned to New York, you could get them in Penn station, but they weren't as fresh as they are when we're making them in a shop. 

They'd been shipped in from somewhere else. It's just different when it comes off that line. 

Todd Hoffman: Yeah, and they're always made fresh daily, but when it's in the fryer and then through the glaze only seconds ago, it's quite a treat.  

Technology is being applied in some retail environments to manage access control and capacity control.

I'm guessing you didn't have to really do that because you were already in a situation where you needed to have bouncers or some mechanism to limit how many people are in the store at a given time? 

Todd Hoffman: There are adjustments we did make for the pandemic. We have virtual queuing so you can make reservations in advance, and again, we didn't know how chaotic the lines would be going up Broadway and down 40th street. And that has helped a lot with the flow.

Mobile order pickup, that's been huge. We have a window on the street, a take-out window or and that's where you pick up your mobile order, and more than double of what we do in an average shop in terms of percentages are done through mobile order. And I'd say that's how we were able to hit our records. We can only have a certain amount of traffic inside the shop. Then when we have this walk up window, we're selling OGs and coffee, but also, picking those delivering mobile loaders, so that was a great add to what we've done. And line queuing inside, there's a lot of subtle technologies that we have used to do line management and we'll continue to optimize. 

Is there dispatch and recognition on that? Like Order #1-5 or Customer #1-5, you can come in now. 

Is that just done by text messaging or are you doing anything on screens?

Todd Hoffman: Yeah, it is. There's push messaging that'll tell you where you are in line and then tell you're third in line and then tell you how long until you need to be at the front door. 

The virtual queuing is definitely a work in progress. The company we went with hadn't done anything quite so complex or customized. I'd say the team that worked on that, which wasn't me, has done a great job of making it work to our needs. That has helped people in line who have been waiting for minutes, if not hours, there doesn't seem to be this issue of somebody walking up right to the door who had a reservation.

And we opened on a Tuesday but our reservations were booked till Saturday. That gives a hint that we were in for a pretty busy week. 

Wow. So last question. Engagement and experience are terms that get tossed around a lot and kind of lose their value in certain respects. How do you define “experience” when it comes to this place?

Todd Hoffman: So much of what our marketing team does - they almost police us - to make sure we're on brand. So we had to be on brand, color wise and with messaging, and yet we wanted to really push the envelope and make a huge statement and have people feel like they were coming to a flagship shop, especially anticipating international travelers who are our lifelong fans when they know there's a Krispy Kreme in Times Square, just like there's an M&M store or what have you, they're going to want to go and our experience, not just buying donuts, like getting to the donut cake and being in the room has to feel like you've arrived somewhere. 

And, I think we have. Our general contractor had a great line in that he doesn't think there'll be another shop like this for a few years, that has put so much into it, that has tried so hard to please its fans, its customers as we have and we've got pretty three racks worth of technology. Technologically wise, he had not handled anything that was this complex, but also, in the front of house with customers, he just felt like there was so much to see and do while you're in the shop, and he's done a lot of stores in Times Square, but he said we had hit it out of the park. So anecdotally, with just from word of mouth or reactions, we think we've done it. 

All right, Todd, thank you so much for spending some time with me. I appreciate it.