Tracking Dominos Digital Pursuits
Dominos Pizza (both Global and India) is one of the QSR organizations (others are Starbucks and McDonalds) that I usually keep an eye on, specifically for their digital initiatives and pursuits. They tend to be pioneering in their efforts in experimenting with and deploying next-generation technologies; that simplifies customer journeys and amplifies their positive experiences. In fact, we had a post early in the days of Outside In covering how Dominos India navigated the pandemic days in 2020 here at:
So, I thought it was a kind time to catch-up with what’s new in their ever evolving maturity in the Digital Arena – in global markets as well as in India. It is possibly a fitting reflection for Outside In to cover (see how far we have come!) as it moves deeper into the (should I say cricket style) “the nervous 90s”. Yes, this will be the 94th Edition of Outside In!! It continuous to be a memorable ride indeed… Thanks to your solid readership!!
A Truly “Digital-first Business”
Dominos says it is now a “truly digital-first business”, with 91.2% of sales made through digital channels in 2021. This was helped by the launch of its new app, which enables group ordering and better promotion of deals. The app alone accounted for 42% of system sales, a 2.2 percentage point increase on 2020. To help drive its digital acceleration further, Domino’s has committed to investing in personalization and the development of its ecommerce app, as well as in-store innovation to enhance the customer experience and boost top-line growth. Thanks to its successful digital transformation, it has seen an almost-2000% growth in market capitalization over the last 10 years and it has defeated its long-time rival, Papa John’s, to become the dominant pizza shop, world-wide. It is considered a poster child of Digital Transformation (see why Outside I likes to track this company…)!
Dominos was, famously, a brick-and-mortar pizza place with a promise to deliver pizzas in “30 minutes or less”. That tactic worked until competitors started beating them at their own game. Dominos needed an edge. In 2011, Dominos then-CEO Patrick Doyle tasked his technology team with a seemingly impossible ask: Make it as easy and efficient as possible for any customer with a smartphone to order a pizza in the 17 seconds it takes for a light to turn green. The team answered the call with a “build and order your own pizza” app. Today, Dominos customers are now more likely to order from a digital platform, such as the Dominos app, than they are to order via a call. And, thanks to their dedication to digital-first innovations like this, Domino’s grew from pizza place to tech titan
Elements of Dominos Pizza Delivery Technology
While this list is barely exhaustive, it more or less covers the key functional areas of their digital investments in the past and, possibly in the future:
Pizza Tracking: Domino’s tracks the pizza from the time it's ordered. It goes to the oven. It sends you a message: It is five minutes away! It is one minute away! Are you ready to eat? And you've already paid for it online. You can take a picture of the pizza, run it through an AI bar and it will tell you the quality of the franchisee (It’s amazing)
Automation & AI: If you order pizza on a Friday at five p.m., Domino’s knows, two weeks later, to remind you that, maybe you want to order a pizza?
Customer Data & Loyalty Initiatives
Delivery Fleet & Operations
GPS-enabled Use Cases
(Proprietary) Sales Technology – that integrates POS as well as (all the) Digital Ordering Channels – like Web, App, Samsung TV, Amazon Echo, Google Home, Car, FB Messenger
(Revolutionary) App UX – with use cases like “Zero-Click Ordering”
Let’s deep dive into a few of these Initiatives pursued by them over the last few years, in the functional areas outlined above, to see how far they have come…
1) Digital Deliveries
Before e-bikes and driverless delivery, 3rd party services like DoorDash and UberEats were coming for Domino’s delivery business. Domino’s could never offer enough menu options to compete with the likes of DoorDash or UberEats, but it could compete on service and delivery times. With majority of restaurants offering delivery, Domino’s had to be willing to get creative to match the competition.
So, Dominos invested in two digital-first innovations to make the delivery process smoother (and to stay ahead of the competition): delivery via autonomous vehicle and delivery via electric bike. Those innovations resulted in 2019 digital sales of “more than half of all global retail sales”
Domino’s partnered with Ford to launch autonomous (driverless) delivery in 2019. The car, called Nuro R2, travels at 25 miles per hour to designated delivery zones in Houston, Texas. Customers who opt for autonomous delivery will be issued a code to enter into a screen on the outside of the vehicle to receive their order. Nuro is Domino’s second shot at an autonomous delivery system—in 2017, it tested driverless deliveries in Ann Arbor, Michigan, where Domino’s is headquartered, via a modified Ford Fusion. That experiment allowed for a safety driver to ride along, but the Nuro has no room for humans; one thing both companies will continue to iterate on in order for Nuro deliveries to be economic, scalable and successful
Domino’s also partnered with Rad Power Bikes in 2019 to launch delivery by e-bike. One bike can hold 12 large pizzas, and it tops out at 20 assisted miles per hour. In some markets, like Seattle, bike delivery mitigates parking issues—and electric assistance helps couriers’ speed-up the process
Customers are able to track their Nuro or e-bike delivery through the Domino’s app, just like they would with any other food-delivery app
2) Omnichannel Ordering & Tracking
From the 17-second challenge to today, Domino’s leadership is dedicated to making consistent improvements to its digital ordering processes. Domino’s cutting-edge artificial-intelligence ordering bot, Dom, allows customers to place orders with little effort. Dom is one of several digital innovations to increase sales for the worldwide chain. In the U.S. alone, Domino's generates over 65% of sales via digital channels and has developed several innovative ordering platforms – like Dom
In parallel, Domino’s AnyWare brings ordering opportunities to the digital tools that consumers use daily, including work communication tool Slack, Amazon Alexa, Facebook Messenger, and more. Technologies like Dom and AnyWare help Domino’s diversify the company’s offerings and open up more revenue streams
3) GPS-enabled Use Cases
Domino’s has always been a leader in innovation, from inventing the 3D car-top sign, now used by taxis, to insulated bags that keep food hot during delivery. Domino’s was also influential in incorporating live order tracking—now standard technology in the restaurant and delivery industries—further positioning them to successfully compete with 3rd party delivery companies. Not to mention GPS help to optimize in-store logistics planning and provide digital transparency to its customers.
The chain introduced online ordering in 2007. In 2008, it quickly turned around and launched its Domino's Tracker, allowing for “better delivery procedures,” as well as more efficient kitchen processes
GPS tracking has back-of-house efficiencies, like the ability for store managers to visualize where drivers are for more efficient logistics planning in-store. Drivers themselves benefit from optional navigation, one-touch customer callback capabilities, and customers who are better prepared to meet them when they arrive. Kitchen staff also know when best to prepare orders if they know where a driver is and can notify drivers on how to set their route for the next round of orders
4) The Innovation Garage
Dominos is so dedicated to tech excellence that they built what they call the Innovation Garage, where they've tested and signed off on many of the innovations already mentioned. One-hundred and fifty employees will be tasked with focusing on technology innovations in the space, which features a fully-functioning pizza theater to develop and test innovations in a store setting. Project-based teams will use the space to pilot technologies such as ordering kiosks, GPS delivery tracking, autonomous delivery vehicles and the company’s AnyWare ordering technology
In Conclusion
Dominos has been one of the true digital transformation stories of our era. The question is where do they go from here? According to Ray Wang (author of the book Everybody Wants to Rule the World), in the digital age, Domino’s real long-term competitor isn’t Papa John’s: It’s Door Dash. The challenge for a firm like Domino's from here on is hard. Because what do they do? Do they go head on with these delivery apps and offer more products? That will be tough because the categories are already taken and Domino’s doesn’t have culinary expertise in all those categories
He suggested starting an offering called “Delivered by Dominos!” and allows small businesses around the country to use Dominos digital infrastructure and its digital technology. They can join with Dominos in creating a separate joint venture startup, in which they could participate and help local businesses succeed and create partnerships with payment organizations and improve that capability along the way. Doesn’t that sound like how AWS begin? Let’s continue watching this space…
References and Sources
1) Capgemini Case Study: Dominos Pizza – Winning the recipe for Digital Mastery
2) Dominos Digital Acceleration (UK): https://www.marketingweek.com/dominos-invest-20m-digital-acceleration/
3) Data Creating Trillion Firms – The Case of Dominos Pizza: https://www.forbes.com/sites/stevedenning/2021/07/23/how-data-creates-trillion-dollar-firms-the-case-of-dominos-pizza/?sh=495ef90f1bc5
4) NCR Blog on Dominos: https://www.ncr.com/blogs/restaurants/digital-innovations-dominos
5) Salesforce Dominos Case Study: https://www.salesforce.com/blog/dominos-innovates-with-technology-not-toppings/
6) Innovation Garage: https://www.restaurantdive.com/news/will-dominos-new-innovation-garage-maintain-its-technology-lead/561338/