Domino’s Success Story: How a struggling Pizza chain embraced technology to win with consumers.
The restaurant industry segment has started to struggle in 2016. While sales are not down, they are growing at a smaller pace and are expected to decline in the fourth quarter. Angst about the election and future of our country has partly been to blame and their is talk about an industry-wide slowdown into 2017. One chain however, has defied these trends and has been able to post incredible year over year gains. That chain is Domino’s Pizza.
Domino’s historically has been known as a value brand, entering into price wars with competitive offerings such as their 5-5-5 deal. However in recent years, they have made a point of embracing technology to remove friction for guests in the ordering process and ensure order accuracy. In Q3 of 2016, Domino’s posted a 16.9% revenue gain year over year and a 13% sales gain, on it’s way to it’s 22nd straight quarter with positive sales growth. That is quite remarkable in what is an extremely competitive industry.
So how has Domino’s done this? Mostly through becoming a digital leader in the space, with over 45% of sales coming from digital channels. Let’s take a look at some technology areas where they have met the consumer where they are and improved guest experience.
POINT OF SALE: First, Domino’s worked with (read: forced) franchisees to all get on one Point of Sale System (for those that don’t know the POS system is the computer powered register that drives all ordering functions and communicates with back of house computer systems to get orders to the kitchens, financials to accounting, etc.). While this may not seem like a major move, this was something that built the basis for all of the technology that came after. Without a unified system, it becomes much harder to build a wide-ranging e-commerce platform. And swaying multiple franchisees with multiple opinions is not always an easy task!
DESKTOP ORDERING: Domino’s was one of the first companies to offer online ordering functionality through their website in 2010, which unbelievably was very new at the time (hard to believe I would have to talk to someone to order pizza at 3am when I was a sophomore in college – that must have been awful). Their integration of the tracker bar was also a revolutionary step that gave the guest more insight into their order status and cut down on the number of calls from people checking on their order. The best part of this? The functionality was already in the POS system for the store so all they had to do was make the information guest facing as well. They also allowed people to create “pizza profiles” that allowed them to save prior orders for easy re-ordering (again, how did this not happen earlier??).
MOBILE ORDERING: Domino’s has also been a fast mover into the mobile space, launching it’s mobile app that allowed guests to order from their phone similarly to desktop or through a popular personal Siri-like assistant by the name of “Dom.” As unecessary as Dom may seem, the company has seen hundreds of thousands of pizza orders made through the voice activated ordering service.
EASY ORDER: Focusing on ease of order and quick re-ordering of favorites, Domino’s launched the easy order platform of digital ordering options. These channels all meant to convey supreme convenience to the guest, with advertising featuring Modern Family’s Sarah Hyland ordering via text message emojis, Eva Longoria ordering via her Samsung Smart TV, Richard Sherman ordering with just at Tweet to Domino’s and Avenger’s Clark Gregg ordering via smartwatch. The company can even let you order via new Ford car models.
CHAT BOTS: The latest innovation from Domino’s is a chat bot integration with Facebook Messenger that let’s you order directly through the platform. Currently, this functionality only allows the easy order pre-sets, but with advances in technology could advance to include custom orders that are interpreted directly by the bot. In addition, this opens up options to group ordering. Imagine a thread on Facebook Messenger when you all discuss what you want to order, with different members of the group all contribute pieces that need to be added. Once you click to let you know the bot that you have all inputted what is needed, the bot can translate all of that to an order directly into Domino’s POS system. The pizza possibilities are endless!
Domino’s has totaled over 15 different ways that you can order without talking directly to a human being. This remarkable effort is due to the company’s embrace of digital technology and their self-ascribed description of a “technology company that sells pizza.” This approach has allowed them to build out a digital team (almost a third of their corporate office staff are on the digital group), developing a “fail-fast” approach that allows them to encourage innovation, and focusing all these efforts on making the experience better for all guests.
As some who works in food marketing, Domino’s is truly an example of best in class digital. They understand guest needs extremely well and are early adopters of technology, developing credibility before their competitors have a chance to react. It is really interesting to see the approach they have taken and the clear dividends they have reaped as a result.
I leave you with one final thought. A candidate we all can believe in…