Assignment task:
Case 1: How Contemporary Technology Impacts Domino's Pizza
Domino's Pizza is the world's largest pizza chain, measured by total retail sales. They have about 15,900 stores and over 260,000 employees across 85 countries. In Canada, Domino's Pizza operates 500 stores, making it the third-largest pizza restaurant chain in Canada by sales revenue. When Domino's introduced its 30-minutes-or-free guarantee, it set new customer expectations for convenience, speed, and efficiency in fast food chains. The Domino's business model consists of three processes: ordering, producing, and delivering.
By the end of 2008, Domino's sales were falling and franchises were failing. The company recognized the roots of the problem: its pizza was terrible. It was still cheap, but their recipes and ingredients had not kept up with the public's rising expectations for quality in both taste and production standards. By then, Domino's had to abandon its 30-minute guarantee after several accidents involving its drivers, one of them fatal. These car accidents caused lawsuits that cost the company millions of dollars and did great reputational harm.
In spring 2009, a YouTube video featuring two Domino's employees did greater harm to the company's reputation. One filmed the other putting cheese up his nose, then adding that cheese to a sandwich. The video went viral, and the local health department temporarily shut down the restaurant. Domino's had the two employees arrested for tampering with food, though because the orders never left the store, they received probation. The president of Domino's operations, J. Patrick Doyle, recorded a two-minute apology that, unfortunately for him, did not go viral.
What Solutions Did Domino's Try?
The Production Process
First, the chain overhauled its pizza recipe. Over 18 months, chefs in the company's research & development kitchens improved the quality of the mozzarella and the flour, added garlic butter to the crust, and sweetened the marinara sauce. This new pizza was more expensive to make, but relatively tastier. This was part of a larger revamp of the menu to improve quality and choices.
The company's new marketing campaign to launch the new menu included television ads and YouTube videos that poked fun at Domino's poor reputation, and included CEO Doyle in a more self-deprecating role. Morning talk show hosts began discussing the campaign, and local television anchors started to conduct taste tests. Part of Domino's social platform marketing plan was a campaign to encourage customers to submit photos of wrecked or otherwise terrible pizzas.
Technology in the Order Process
By winter of 2010, the company had regained so much success that they needed to integrate digital technology into their ordering processes to prevent stores from being overrun. Most Domino's locations still primarily took customer orders by phone, with no online communication channels. As they updated their website and stores with digital order processing systems, the company began to use many different channels: Facebook Messenger, Twitter, Apple Watch, voice-activation, "zero click" methods, even a wedding registry. Customers could track their order's progress and delivery driver's location online. By the 2020s, customers could use Amazon's Alexa and Google Home voice-based assistants to place orders. Domino's goal was that customers could place an order with a device as easily as if they were speaking to a person.
Improving the Delivery Process
Alongside using digital technology to improve the customer ordering process, Domino's leadership wanted to improve delivery in a similar way. Since more than half of the company's front-line employees were delivery drivers, this made a major segment of its operations and employee base. Here are several examples of experiments and trials Domino's began to find more efficient delivery methods.
Several Australian Domino's locations began using a tool to track their customers' progress to arrive at their stores for pickup to improve just-in-time readiness. A store in the New Zealand town of Whangaparaoa has used drones with a range of two kilometres to deliver orders. However, the drones' fairly short range and the fact that they can only land in backyards limits their use. Some New Zealand Domino's franchises began testing land-based robots to deliver orders, though they have difficulties navigating uneven sidewalks, and most NZ cities don't allow robots in vehicle lanes. In the USA, only about a dozen states allow delivery robots, including the high-population states of Pennsylvania, Virginia, Florida, and Ohio.
Challenges for the Future
However, technology adoption remains a roadblock to rolling out any of these experiments into franchise-wide policy. Many customers still order food from Domino's with telephone conversations, and almost all the deliverers are still humans. As well, just over one-third of Domino's customers visit stores and eat their food in them, so all locations must have clean, bright seating areas.
On-demand delivery services like UberEATS and GrubHub are also pressuring the company's marketing efforts, because Domino's is often relegated to one among many restaurants in the customer menus of these apps. Despite Uber's consistent lack of profitability, it continues to present challenges to previously dominant chains like Domino's in securing their key customer demographics of lower and middle income people. However, Domino's still holds the highest customer loyalty of any American pizza chain, its global revenues top $16-billion per year, and its share price has grown more than 6,000% since 2008.
Questions
1. Describe two benefits that digital technology has brought to Domino's?
2. Describe two limitations of the specific digital technologies that Domino's franchises have experimented with?