The secret to Domino's pizza success isn't the pizza

Domino's Pizza

Every now and then we like to look at the business behind food, and this article in the Motley Fool struck us as interesting. The article discusses the surprising continued growth experienced by Domino's pizza chain. The growth is not, as you would expect, from new stores - same stores sales have increased for 79 straight quarters. And it isn't from new products -  everyone pretty much knows what they'll get when they order a Domino's pizza and there are only so many ways you can spin Cheesy Bread as a new concept.

Rather the reason for Domino's success is our inherent laziness - at least when it comes to pizza. And it's not because Domino's is delivered, but rather it's because we no longer have to exert ourselves to make a phone call. According to Domino's recent analyst conference, "over 95% of smartphones now have the ability to order a pizza without even making a call - and, as such, digital sales have risen to 40% of Domino's Pizza sales (the majority of the rest is phone orders, with only 10% walk-in). This compares to an industry average of just 12% or 13% in 2012.  Mobile sales specifically were up 102% year-over-year."

As a result, Domino's will not be pushing cost-savings or new products as much as they will be pushing the convenience of digital sales. Per the CEO, "We are not in the product of the month club anymore," he said. "You are not going to see us launching things every six or eight weeks like we have in the past. We think that what we are doing is building overall brand momentum by focusing on fewer, bigger things that are truly improving the experience for our customers."

And how does it work?

"Our customers can now create personalized profiles so they can save information, like credit card or address, as well as their favorite orders, letting them order in as little as five clicks or about 30 seconds," Mr. Doyle said "This is great news, particularly for our mobile users who want speed and convenience while using a small keyboard. We expect this to be a very popular feature, and one we believe will give us a competitive advantage over a pizza company without this handy feature."

The bottom line? If you prefer your local, independent pizza joint and want to keep it healthy  - it might be worth taking a few extra seconds to make a phone call rather than a click.

 

3 Comments

  • FuzzyChef  on  12/2/2013 at 10:46 PM

    Or it shows you that maybe our local pizza restaurants should pay more attention to online ordering.

  • boardingace  on  12/3/2013 at 10:08 AM

    I thought that they had recently "upgraded" their ingredients and were now making a better pizza? Maybe I am getting them confused with another company.

  • Waderu  on  12/5/2013 at 11:36 AM

    I work for Domino's and yes, we have improved all of our products in the past 5 years...pan and regular crust pizzas, etc.

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