When Domino's Pizza CEO Patrick Doyle first described his ambitions to make Domino's "a tech company that sells pizza," I'm sure that raised some eyebrows. Today, Domino's is still getting that same reaction, but this time, for a different reason all together: 28 consecutive quarters of positive comparable sales, with its last-quarter revenue topping off at $100 million more than expected, reported Forbes (April 30).
The company is quite confident it can outdo its rivals, according to Doyle. As powerhouses like McDonald's and KFC use third-party delivery aggregators to make their presence known in the delivery space, Domino's continues to maintain its laser focus on tech innovation and grow its own delivery business. While those companies are new to delivery, Domino's is now delivering to customers using hot spots on the beach and other locations without a physical address. The company is even testing driverless cars in Miami with Ford.
In addition, the company's implementation of automated phone orders via artificial intelligence assistant DOM should further expand its digital ordering business beyond the current 65%. According to research from BTIG, traditional phone and counter orders cost at least $1 worth of an employee's time, while each digital order costs about $0.25.
This is the story of the pizza chain of today -- and the future. It's not enough to simply deliver a pizza anymore. To stay competitive, pizza restaurants must meet the demands of tech-savvy Millennials, and consumers in general, and deliver convenience, customization and value, as well. And the pizza heavy hitters -- the Domino's, Papa John's and Pizza Hut -- -know that what the consumer really wants is a hearty side of "wow factor," too.
Papa John's same-store sales in North America fell 5.3% in the first quarter, a steeper dive than the 4.8% expected by StreetAccount, reported CNBC (May 9). The company has seen Pizza Hut and Domino's lure consumers with discounts and loyalty programs -- Pizza Hut's same-store sales were up 1.8% in the first quarter and Domino's saw same-store sales spike 8.3% in the U.S. -- so Papa John's has put together a plan of its own to stay competitive.
The company recently reduced its pizza prices and is planning more technology investments as it simultaneously attempts to alter its perception with consumers. Papa John's, which mutually ended its partnership with the NFL in February, wants to be seen as a value-oriented restaurant that isn't reliant on sports marketing for sales. The idea is for the company to be involved with the NFL in a new way and, at the same time, work on attracting an audience independent of sports or the NFL, CEO Steve Ritchie said.
Papa Murphy's hopes to compete with the more dominant pizza chains by expanding its delivery service to about half of its stores in 2018. In addition, the company entered into a $7.7 million refranchising agreement with Fresh Take LLC to take over operation of Papa Murphy's 30 company-owned Colorado stores, reported Seeking Alpha (May 9).
The company's investment in technology has paid off, as its check averages are 20% to 25% higher for orders placed online. Papa Murphy's is looking toward a relaunch of its mobile app in the second half of 2018, and a loyalty program is in the works.
But no discussion of the pizza wars would be complete without Pizza Hut, who partnered with Toyota on developing a driverless concept vehicle that could one day cook and deliver Pizza Hut pies, reported Eater (Jan. 8). Yes, you heard that right.
This move will surely be closely watched by Domino's, who has been the leader in pizza delivery innovation with drones, self-driving cars and vehicles equipped with backseat ovens. But Pizza Hut has really changed the game and combined two innovations in one by installing those backseat ovens in autonomous trucks.
Toyota introduced the vehicle, which it calls the "e-Palette," at the Consumer Electronics Show in Las Vegas, NV, earlier this year. Test models could hit the streets by 2020, according to the Business Insider. And then, it will just be a little while before Pizza Hut can trim down its employees to not include professional delivery people.
If that's not exciting enough for you, in spring 2017, Pizza Hut even brought us a shoe that could send a Bluetooth signal to your phone and then, once confirmed, you could get a single pizza delivered to your home, reported Paste (March 5). This spring, Pizza Hut returned with a sequel shoe, "Pie Tops II," which now also lets you send a signal to your DVR receiver to pause your TV while you collect your pizza order.
As a girl growing up in suburban New Jersey, my dream of a perfect pizza was one with extra cheese that showed up on time. I never imagined pizza could go this far, but maybe that's the whole point.
[Editor's note: OFW Law Principal Attorney Michael J. O'Flaherty provided this blog piece regarding the need for federal oversight regarding the ongoing trend of class action lawsuits filed against food companies regarding product labeling.]read more
Sarah writes for the weekly Food Institute Report and the daily news update, Today in Food. She also writes and edits the Food Institute’s annual publication The Food Industry Review and assists with The Demographics of Consumer Food Spending.
Sarah has more than 15 years of experience as a writer and editor, with a well-rounded knowledge of the food industry and business-to-business research content. Her background includes an editorial role at Convenience Store News magazine, and she has worked for Nielsen, the USA Today Network and Bauer Publishing.
Sarah is currently working on her MBA at Rutgers University. She can be reached at firstname.lastname@example.org to talk about anything food-related.
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