In 1964, a Canadian hockey player named Tim Horton started a small coffee shop.
By 2002, Tim Hortons had twice as many Canadian outlets as McDonalds, according to the Ottawa Business Journal, while Marketing Magazine reported in 2005 that the franchise had surprassed McDonald's in sales in Canada. The chain now accounts for nearly 23% of all fast food industry revenues in Canada, commands 76% of the market for baked goods, and holds more than 60% of the country's coffee market, according to Bloomberg.
With more than 3,300 restaurants in Canada and an additional 700 in the US, Tim Hortons employs over 100,000 people and does more than $2.5 billion in revenue annually. In a nutshell, it's big.
Which is why it's shocking to me that it took the company until 2012 to start doing things it should have done years ago.
In April, Tim Hortons introduced TimmyRun, a web-based tool that allows customers to combine beverage orders for up to groups of 20 people at once and makes it easier for beverage runners to take everyone's order. It's a good idea but one that fell short in a few areas.
Tims failed to create a mobile optimized site. And it didn't make it a mobile app either. Yet someone on a coffee run doesn't have their desktop with them. They have their smartphone.
In May, Tim Hortons finally started accepting Visa credit cards. For a company that size to not accept Visa cards is absolutely stunning. And the company didn't take MasterCard until 2007 or debit until 2010. Can you believe it? I certainly can't.
This month, Tim Hortons announced free wifi was coming to 90% of its stores by September. Free wifi will no doubt prove a great boon for Tims, but it is far from a competitive advantage. Indeed, Starbucks has offered free wifi since 2010, and it wasn't even the first to the party. Before that, Starbucks at least offered paid wifi and short-term complimentary wifi—more things Tims never did. Most Canadian coffee chains, from Blenz to Waves, all offered free wifi before Tims.
Tim Hortons has spent this year catching up but it's still behind. Starbucks brought mobile payments to iPhones in Canada in 2011 and just this week did the same for Android users. It's been a smashing success: Starbucks processed 40 million mobile payments in a just over a year and adoption is accelerating.
Starbucks has nearly 2.7 million Twitter followers and almost 12,000 tweets while Tim Hortons has less than 30,000 followers from just 3,000 tweets. Tims isn't social and it's not engaging users online. Starbucks has been flirting with social since 2008 and today offers a much richer experience on social networks, its website, and its mobile apps.
Tim Hortons is a great company. It's a distinctly Canadian restaurant that millions of people across the country spend money at every day. But Tims isn't realizing its own potential in the next frontier: technology.
Starbucks is now as much a tech company as it is a coffee shop. It's how they're capturing the next generation of coffee drinkers who want more than just a shot of espresso—they want an satisfying experience that continues seamlessly from their café chair to their smartphone to their home.
Tim Hortons, meanwhile, is nowhere near accomplishing this. The company has made tremendous strides this year in a bid to catch up, and for that I applaud them. But they still have a long way to go.