How did Domino become a “pizza tech company”?

Former CEO Patrick Doyle of Domino’s pizza company has emphasized many times over the past few years: “We are a technology company that sells pizza”. So, how did Domino’s journey to become a “pizza technology company”?

After a period of “heavy” at the end of the 20th century, Domino’s pizza company entered a period of saturation in the early 21st century. The financial crisis of 2008 greatly affected companies across the world. worldwide, and Domino’s is no exception. The company has a debt of up to 1.7 billion USD.

To ease the financial pressure, they cut the cost of ingredients as much as possible, but this made the quality of the pizza worse, and Domino’s customers started leaving. Between 2006 and 2008, sales in one of its domestic stores fell by as much as 10 percent. Their number of franchised stores has decreased by 100; Meanwhile, the stock price fell below 3 USD.

In the midst of difficulties, the company has made major turning points. First, they created an advertising campaign to acknowledge the poor quality of the pizzas, and it was the Domino’s CEO who said it directly. Then they promise the customer the quality of the pizza will be changed. This is one of the most successful advertising campaigns of all time.

In addition, they began to invest more in the technology element. This is the leverage that makes Domino beat Pizza Hut’s leading market share in 2017.

In 2008, Domino’s launched an app that allowed customers to track the progress of their pizza delivery. At a time when companies like Uber weren’t around, this was a huge revolution. This not only helps customers feel more secure about the products they order, but also helps Domino to operate much more efficiently in logistics.

Former Domino CEO Ritch Allison added: “Chefs will know when they should prepare food based on delivery progress data. Once the delivery person returns, the chef can notify them. know which delivery route is the most optimal”.

In 2014, Domino launched the AI ​​Dom virtual assistant to help customers place orders via voice. In addition, based on customer data from the past, assistant Dom can also know what customers will order when logging into the application, and then book for the customer. With the help of the virtual assistant Dom, the customer experience with Domino has been much better.

Mr. Tim McIntyre, Domino’s communications officer, once said: “We have a lot of data from our customers. Domino knows where customers live and what their preferences are.”

With this big change, in 2015, half of Domino’s revenue came from online sales. Meanwhile, Domino’s online sales channel market share accounts for 31% of the entire US market.

Domino’s constantly experimenting with new technologies in the following years. In 2016, they officially became the world’s first pizza company to test delivery by drone. Although this plan failed, Domino’s constantly improved its delivery process by using driverless cars and electric bicycles.

In 2019, Domino teamed up with Ford to launch an autonomous delivery driverless car. This car called Nuro R2 can move at speeds up to 40km/h. In addition, they combined with the company Rad Power Bikes and launched electric bicycles. This is a vehicle that can help delivery people carry 12 pizzas at a time and support speeds up to more than 30km / h.

The launch of these cars has contributed to making customers more and more satisfied. In 2019, online sales accounted for more than 50% of Domino’s retail sales globally.

With a major change in its business model, Domino’s 1-year revenue has grown from over $1.5 billion in 2010 to $3.4 billion in 2018, at a compound annual growth rate. nearly 11% year. Meanwhile, the company’s share price has skyrocketed with 3,200%, or 32 times, much larger than the increase of the S&P Index, with only 164%.

  How did Domino become a tech company that sells pizza?  - Photo 1.

When consumers tend to switch to brands that bring a lot of convenience to them, companies that know how to seize opportunities will have many advantages before competitors.

Source: Forbes, CNBC

According to Tien Luat

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