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Change is slicing into the global pizza business, and the biggest change has nothing to do with toppings, crusts, shapes, sizes or ingredients. It’s technology.
America’s top pizza brands—Pizza Hut followed by No. 2 Domino’s Pizza and, to a lesser extent, No. 3 Papa John’s—are using a new focus on online and mobile ordering and other digital touchpoints to continue to grab share from one another but, especially, from the thousands of independent pizza shops that always have been a big part of the fabric of the pizza industry in the United States.
Arguably, Domino’s ranks No. 1 in digital engagement and expertise among its peers. The Ann Arbor, Michigan-based brand began 2014 with an announcement at the Consumer Electronics Show in Las Vegas about a pizza-ordering app for Ford’s Sync infotainment system and ended this year with its first national ad campaign focusing on digital technology, with a 30-second TV spot promoting the introduction of its Siri-like “Dom” mobile voice ordering.
Credit goes to Domino’s CEO J. Patrick Doyle, who has overseen this sweeping transformation with a series of smart moves.
For example, Doyle had the foresight to bring in Kevin Vasconi, from Stanley Black & Decker, as his Chief Information Officer to make the brand’s IT infrastructure and mobile and tech platforms work seamlessly.
Also along the way in a tenure that began in 2010, Doyle has launched a badly needed reformulation of Domino’s basic pizza formula, established a new brand positioning based on transparency and brought the chain’s first fresh pan pizza to market.
Ahead of CES 2015, where Domino’s is keeping an eye on wearable tech thanks to its partnership with Pebble, brandchannel spoke with Doyle about how Domino’s mixes digital innovation with customer experience for a winning combination.
brandchannel: One of your auto industry colleagues down the road in Detroit, Cadillac CMO Uwe Ellinghaus, recently got in hot water for saying that Cadillac wants to become a “luxury brand that just happens to make cars.” Does Domino’s aim to become a technology brand that just happens to make pizza?
Patrick Doyle: No. At the end of the day, we’re an extremely customer-focused brand, and we’re only responding to what customers want. We’re a pizza company first; we have to give customers great pizza. That’s why we changed [the formula] a few years back. We’ll always be known for great delivery too; that’s where our heritage was. And we want to have an equally good carry-out experience.
But what customers have shown us is that they want access to the brand through technology, and they want it anytime, anywhere they are no matter what screen is in front of them, whether they’re driving their Ford or in their living room or on a laptolp or mobile phone. They want to be able to access the brand through technology. And we have pretty drastically changed our model over the last five to seven years to accommodate that.
brandchannel: What’s the outlook for digital orders?
Doyle: We’re approaching half our business now being digital ordering. And between the three biggest players in the pizza business, we are doing 85 percent of the digital orders in the industry. We’ve had the scale to make the investments, to put together platforms that will create customer experiences. So that share will go up. That’s where consumers want to go.
brandchannel: Is digital helping Domino’s gain market share against Pizza Hut and Papa John’s as well?
Doyle: The last few years we’ve been growing faster than anyone else in the category. [Digital ordering] has given us some level of competitive advantage versus our natoinal compeitors, but the bigger advantage has been against digital playes who simply aren’t offering it.
brandchannel: Domino’s doesn’t have a customer loyalty program. Why is that?
Doyle: We’re always analyzing what the customer is looking for. We’ve considered that and will continue to consider it in the future but to date — it’s about prioritizing where we make our investments.
brandchannel: Speaking of investments, Domino’s franchisees around the world also have continued to invest in the store remodeling concept you call “Pizza Theater.” How is that going?
Doyle: We’ll be done with it globally by the end of 2017; right now about 1,000 of our domestic stores and franchisees have done it, and we’ve introduced it abroad as well. We always have been delivery guys, but the fact is that about one-third or more of our customers choose to use carry-out as their way of doing business with Domino’s, and that experience hasn’t been great. Stores haven’t looked great, and locations haven’t been perfect. They need to be welcoming.
So the thing we’ve done as part of that is that people want to see the food—the quality of the food, who’s making the food. So this was a pretty simple decision for us to make. There’s some magic to seeing people stretch out the dough and doing that in front of them, especially in front of kids. We’re updating the look and who we are as a brand, and opening up kitchens and letting people see the food being prepared. It’s clearly very high on the list of what customers want.