In 1989, nearly thirty years after its founding, Domino’s Pizza introduced the first new product in its history, the pan pizza. In the years since, it steadily rolled out new food products that pushed it to the top of the global pizza food chain. But the real story of innovation at Domino’s has less to do with food and more to do with its relentless pursuit of technology to revolutionize ordering and delivery.
I caught up with Art D’Elia, Domino’s executive vice president and chief marketing officer, as part of our Becoming Retail series, to learn how he thinks about technology, innovation, and digital transformation. D’Elia came to Domino’s after yearslong marketing, brand, and innovation stints at CPG giants PepsiCo and Danone.
“I’ve been focused on trying to accelerate the pace of digital transformation and innovation,” he said. “We’re in a category that is rapidly evolving, and we have a new set of competitors that we refer to as the aggregators, like Uber Eats, Grubhub, and DoorDash, so you have to evolve your business model. The question is how do we change more rapidly to make sure we continue to be at the cutting edge of technology and digitization, but also are continuing to be really customer centric in our approach.”
We’ve heard ad nauseam for years that the way to win with consumers is not with great products (although that is always important) but with great experiences that make buying easy, innovative, even fun. Since it launched its website in 1996, Domino’s has set a high-water mark, and not just among food chains, for using technology to do just that.
Nearly 70% of Domino’s sales are made through digital channels in the U.S.
The list of firsts and innovations are almost too numerous to mention: fans can order through its mobile app, of course, but also through a smart watch, Twitter, Slack, smart TV, Ford Sync, Amazon Alexa, Facebook Messenger, and more. With “zero-click ordering,” fans with a “pizza profile” open the app, which automatically orders their preferred pizza after a 10-second clock runs down. Nearly 70% of Domino’s sales are made through digital channels in the U.S.
Delivery, too, has seen incredible yet practical innovation. Some examples: GPS hotspots that enable pizza delivery to parks, beaches and other non-addressed locations, and delivery by e-bike. More recently, it has been testing autonomous vehicles and drones for delivery. While many other restaurants were hit hard by COVID-19, Domino’s was primed. It had already been testing a way for customers to pick up an order without entering the store, so it was able to quickly get a new “Carside Delivery” program — wherein Domino’s employees bring carryout orders to customers’ cars — up and running nationwide in the spring. That’s just one reason why the company thrived while others faltered during the pandemic, noted the Wall Street Journal.
Through its loyalty program, Domino’s has amassed a database of 85 million unique customer profiles.
One of the ways D’Elia helps Domino’s focus on customer centricity is by curating, analyzing, and segmenting customers. Through its loyalty program (more than 25 million active users) and myriad digital channels, Domino’s has amassed a database of 85 million unique customer profiles.
“It’s a huge luxury to be able to have that data because it opens up many more opportunities to use digital tools that allow us segment consumers and do precision marketing in a way that is very difficult to do on the supplier side, like in consumer packaged goods.”
While D’Elia leads marketing and drives initiatives for its more than 17,000 locations worldwide, innovation at Domino’s is a broad organizational endeavor that transcends marketing.
“We don’t innovate as a marketing function,” he said. “We innovate as a company, and it’s a shared cross-functional responsibility to bring that innovation to market.”
The most recent example, he said, is the nationwide launch of carside delivery. “We accelerated the launch because of the COVID crisis. Many people externally probably viewed that as a marketing innovation because it’s a way for us to provide a new pickup option for consumers. But it really was a shared innovation that we worked on cross-functionally and that is the way, at least in our model, we’ve been able to really successfully innovate at a faster pace because we have that shared accountability across the enterprise.”
Measuring the impact of innovation
Of course, innovation for its own sake isn’t worth much to the business if it doesn’t drive positive results. One of the keys to success at Domino’s is its ability to measure the impact of its innovations. D’Elia concedes that it is challenging with its business model — 98% of its U.S. stores are franchise-owned — where the franchisees are entrusting a centralized organization to invest in initiatives that will drive traffic and business.
Having a definable goal, D’Elia believes, is a key ingredient that makes innovation work for the organization as a whole and its franchise partners.
“We need to be able to measure that for them and come back to them with a business case,” he said. “It’s a luxury that we have the [customer] data, so we can measure very precisely the impact of these innovations. Once you define your objectives upfront — are you trying to drive incremental orders, take cost out of the business, increase frequency with existing customers- you can take specific actions then measure against it. We are very disciplined in that analysis, and that’s been crucial in the high hit rate that we’ve had on successfully launching a lot of innovations over the last decade.”
One of the key, ongoing objectives for Domino’s is orders, which D’Elia says is crucial to driving sustainable same-store sales growth. He and other senior leaders constantly focus on how to innovate to drive order growth.
“It’s really difficult in this business to drive growth by just getting customers to pay more, so we are always looking for ways to drive more orders, more tickets, and figuring out how our innovations are contributing to driving incremental orders. The bottom line is that if consumers don’t adopt a specific feature, they’re not going to order a pizza.”
More opportunities for growth and innovation
In terms of growing its footprint, D’Elia says the company has a “huge opportunity” for growth in international markets which, despite more than 11,000 international locations, are not nearly as developed as in the U.S.
“We’ve built up a lot of expertise and experience digitally transforming our business,” he said. “The challenge for us and a lot of marketers is continued fragmentation of media and the consumer. They just have more choices than ever, so it will be a challenge to reach them.”
D’Elia is bullish about voice for not only discovery, but to further take friction out of the ordering process and help them interact with customers through the ordering and delivery process.
“We’ve become famous for our pizza tracker, and voice is another technology that can enhance the tracker experience and really create more transparency between us and the customer. It’s an area where there’s going to be great innovation.”
Its emphasis on technology has helped Domino’s achieve more than half its global sales through digital, and nearly 70% in the U.S. As a marketing executive, D’Elia is relentlessly focused on using technology to make things easier for customers — every consumer brand can learn from this.
“If I were to choose one word to describe retail I’d say focused,” said D’Elia. “A lot of critics have said the retail industry has been slow to transform, but I think that’s changing. Coming into the pandemic, retailers refocused their efforts on being customer-centric, and marketing is at the center of that.”
“Marketing is still about understanding consumers and appealing to them, making sure everything is about making the experience better,” said D’Elia. “That’s not specific to Domino’s. It’s category agnostic.”