Doing my daily scroll through Twitter, I happened to come across a TechCrunch article about how we have to readjust the way we value companies. While an interesting read on it’s own, there was a section about how companies are redefining themselves to keep up with this new era of digital business, and one line stood out from the rest: “Domino’s is now a tech company that happens to make pizza.” Yeah, I scratched my head too and just chalked it up to Domino’s trying to stay relevant. But then, I dug a little deeper…
Domino’s, Pizza Hut, and Papa Johns, the three giants of American pizza. While they’ve all been around for as long as I can remember, this name recognition wasn’t doing much for Domino’s. Their stock price hit a record low of $2.83 in the year of 2008. Long gone were the days that receiving pizza in less than 30 minutes was enough to pull the trigger. A lack of desire for Domino’s coupled with an economic recession put them on a downward spiral.
Fast-forward 2 years: Spearheaded by Chief Marketing Officer Russell Weiner and Chief Executive Officer J. Patrick Doyle, Domino’s attempted something new. They admitted their pizza sucked. They got back to the drawing board, created a new recipe, and relaunched their pizza coupled with a new series of ads apologizing for their previous quality. The result? Their sales were up 10% that year.
Domino’s didn’t stop there. Led by Weiner, they launched a Think Oven, “a Facebook platform where customers and fans can submit their suggestions in two categories: the Idea Box (for general ideas, e.g. new menu items, tips for going green, etc.) and Current Project (for specific things Domino’s needs help with, e.g. this month’s topic of “New Domino’s Uniforms”)” and they let people Tweet whatever they wanted to (good, bad, etc) and posted it on their website. Domino’s whole new pizza roll-out wasn’t specifically about the pizza, they wanted to let the customers know that what they want mattered. This presence on Facebook and Twitter was to make sure another “we suck” campaign wasn’t in the works. Domino’s even began to call their new brick-and-mortar stores “pizza theaters,” wanting the consumer to feel that they had unadulterated access to the process of pizza making. Essentially Domino’s strategy boils down to “transparency is key.”
With the very essence of Domino’s back in order (quality of the pizza), they have slowly shifted the business of what it does. Domino’s isn’t about making pizzas anymore. Domino’s is in the business of ordering pizzas. Perhaps the most famous facet of any pizza ordering system in the world right now is Domino’s live tracker. I think all of us here at BC have had at least one or two Friday nights at 1:30 AM, anxiously watching the tracker work it’s way to the right, waiting for the out for delivery sign.
Tracker’s are old news now, as everyone from the local pizza place down the corner to the multinational pizza establishment has one. Domino’s is looking ahead. With nearly half of all of their sales being digital, Domino’s is trying just about every way it can to make people continue to order their pizza. The pizza giant has led this effort through its AnyWare platform. First, consumers need to build a profile, providing Domino’s with all the essentials (name, address, pizza you want, etc). Then, if you can communicate with it, you can probably order a Domino’s pizza with it. Thanks to this profile, you could tweet an emoji of pizza and have a pizza delivered to you. You can download Domino’s Zero Click app and order pizza simply by opening an app. Then there’s Ford Sync, Samsung Smart TVs, Amazon Echo, Facebook Messenger, Tweeting, your phone’s personal voice assistant, and smart watches. These are all devices you can order pizza from. Oh and yes, you can still call and order.
Domino’s efficiency is a 2-way street and they know that, so Domino’s is trying to decrease delivery times on their end too. In the past year, Domino’s has unveiled their DXP or Delivery ExPert. It’s a Chevy Spark with an oven built in, capable of carrying 80 pies. Even though delivering pizza in a car/oven makes even emoji ordering sound un-gimmicky, Domino’s seems serious about this venture. There are currently 154 DXPs in the United States right now and some are in use around the Boston area. Plus, the car was put together by Roush Enterprises, the same group that worked on Google’s self-driving cars.
So what did all this innovation and change lead to?
Well, that $2.83 stock price? As of right now, it is $153.49 a share. The price has risen 177% in the last three years alone. Furthermore, Domino’s market share has increased from 9 percent to 12.3 percent since 2014. While they are still second to Pizza Hut, who has about 14.4 percent, Pizza Hut’s market share has been slipping since 2014. Even while being second in market share, the latest figures show that Domino’s has done $4.7 billion annually in global digital sales. And it seems like we can expect the company drive’s to innovate to continue judging by this statement CEO Doyle made in a recent interview with PricewaterhouseCooper
“Smart companies are finding ways to use technology to dramatically improve their customers’ experience and we’re going to see more and more of that.
What you’ve seen to date are a lot of businesses that have been simply about social media or very specifically around only the technology. What you’re seeing today, with the different car services, is about taking the technology and putting it together with bricks and mortar, with the real world, and coming up with some really unique ways of changing business models.
And that’s what we’ve done here. We’ve gone from no online orders a decade ago to where we’re quickly approaching half of our business is in digital. It’s been pretty transformative for us and for our customers’ experience with the brand. I think that’s what you’re going to see more of going forward, these great ideas paired with the real-world experience for customers. This is the place where the most innovation is happening.”
While Domino’s may not compete directly with Apple or Microsoft, just know next time you order a large pepperoni (via emoji of course), that you are ordering from a tech company, not a pizza one.
(In case you were getting hungry, click here for some Domino’s)