Using Tech to Sell Pizza Topic: Technology and strategy
Since 2008, Domino’s Pizza has fanatically pursued any and every possible “digital doodad” to sell pizza. Here’s a brief timeline showing the company’s progressive investment in technology:77
2008 Pizza Tracker, a system to track pizzas on their way to their destination
2013 Domino’s Live, a camera live-streaming from a store kitchen in Salt Lake City
2014 An app that let customers order and pay from their Ford vehicle
2014 Dom, the Siri-like, order-taking voice, making online ordering more conversational
2015 DXP, a retrofitted subcompact, designed to keep up to 80 pizzas warm
2016 AnyWare marketing campaign, touting that customers could order from anywhere with any of their tech ware
2017 Drone delivery tested in New Zealand
2017 Driverless car deliveries tested in Ann Arbor, Michigan
Why Domino’s is Winning the pizza wars!
With more than 14,400 stores around the world (85 countries), Domino’s finally claimed the title of largest pizza chain by global revenue besting longtime rival, Pizza Hut. Using innovative technology, clever marketing, and creative ordering methods, Domino’s is winning the pizza wars! While making a pizza is still very traditional and hands-on, marketing a pizza, at least in Domino’s playbook, is very little human and a whole lot digital contact.78 As Domino’s has increased its tech credibility, its financial results have been improving as well. As one analyst said, “Domino’s figured out mobile ordering before Starbucks and delivery before McDonald’s.” 79
It was a different story altogether back in 2008. Domino’s was experiencing declining sales and disappointed franchisees. The company’s stock bottomed out at $3 a share. In the spring of 2009, a moment dreaded by every fast-food chain in the YouTube era . . . one employee at a store in North Carolina filmed another employee putting cheese up his nose and adding snot to a sandwich. Well . . . you can imagine the outrage.
(Note: The products tampered with never left the store, and both employees were put on probation.) But that wasn’t even the biggest strategic threat to the company . . . it was the reality that their pizza wasn’t actually all that good. Consumer tests resulted in comments like: “The crust tastes like cardboard. The sauce tastes like ketchup. This is an imitation of pizza.”80 Company executives knew that something had to change.
Company chefs experimented and enhanced the taste of the pizza. The CEO starred in an ad campaign in late 2009 acknowledging that the company had heard its customers that Domino’s pizza just wasn’t very good—and did something about it. The ad campaign struck a chord with the public, and by February of 2010, Domino’s was selling so much pizza, it almost ran out of pepperoni! In addition to its tech investments, Domino’s revamped about 85 percent of its menu.
Domino’s tech team numbers almost 400, the biggest division at corporate headquarters. The preceding timeline explains what the team has been doing. They’ve taken the simple act of ordering a pizza and given it a tech twist. There are at least a dozen different ways to order a Domino’s pizza now . . . not including walking into a local store.
But all those orders means getting the pizza to the customer in a timely fashion. Right now, more than half of the 260,000 Domino’s employees are drivers. (And the company had to abandon its long-running “30 minutes or it’s free” marketing slogan because of several accidents, including one fatal, that cost the company millions of dollars.) So there are some areas where tech solutions are still being tested. Stay tuned, though, because Domino’s likes winning the pizza wars, and it likes being on the forefront of technology!
Discussion Questions
5-23 What role do you think goals might play in planning for Domino’s future? List some goals you think might be important. (Make sure these goals have the characteristics of well-written goals.)
5-24 What types of plans would be needed in an industry such as this one (for instance, long-term or short-term, or both)? Explain why you think these plans would be important.
5-25 What contingency factors might affect the planning Domino’s executives do? How might those contingency factors affect the planning?
5-26 Get in your assigned group and discuss the following: What competitive advantage(s) do you think Domino’s has? What competitive challenges do you think the company faces?
