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Is Domino’s a pizza company or a tech company?

Techly's Guest Post Series
Pizza production hasn’t changed much at Domino’s since the company’s foundation in 1960. Very few new menu items have been introduced.

New ordering methods outnumber new menu items. Customers can now order pizza via Facebook, Twitter, Apple Watch, voice, “zero click”, and a new wedding registry. You read that right—wedding registry.

In 2015, for the first time, more than half of Domino’s orders were placed online, and half of those came via mobile.

Being well-known for their delivery processes, Domino’s has invested in a fleet of “the ultimate pizza delivery vehicle”. The customised Chevrolet Spark known as the ‘DXP’ has special side doors and warming ovens with space for 80 pizzas.

The design took 5 years to develop. There are 154 DXPs on the road, with no immediate plans to introduce more—in part because autonomous vehicles are coming. Delivery is a competitive advantage, and Domino’s is manoeuvring for early adoption of autonomous vehicles to hold on to the advantage. The Chief Digital Officer of Domino’s, Dennis Maloney, explained the strategy: “We’re delivery experts. If everyone becomes an expert, we’d have to figure out other ways to differentiate ourselves.”

As its technology credentials ramp up, so do the commercial indicators. At the end of 2008, Domino’s was threatened by declining sales and distressed franchisees. Since then, its share price has increased 60-fold. The company is now worth $9 billion.

Its pizza restaurant market share has moved from 9 percent in 2009 to 15 percent in 2016. Sales last year rose 10.5 percent, the fastest growth rate of the top 10 quick-service chains.

This growth isn’t entirely driven by technology. In 2009 Domino’s bravely identified it had a fundamental product problem – research found that people even liked a pizza less if they knew it was from Domino’s. The company reinvented its product by experimenting with ingredients and flavour over a period of 18 months. The result was an improved product that, while more expensive to make, set the foundation for dramatic commercial growth. The product had been fixed. Technology then enabled growth.

A new retail design is now evident at a Domino’s location in New York City. In a departure from the company’s traditional design, the new-look Domino’s restaurant is designed so customers can see their pizza being made. It’s brighter, cleaner and more open. By the end of the year, most Domino’s locations will have been refitted. Setting the foundation, again, for more technology-enabled growth.

While technology has been fundamental to success, all technology doesn’t need to touch every customer to move the needle. Some tech has a broad application, like mobile ordering. Some have far narrower applications, like the DXPs. Together, it builds the credentials and collectively drives success.

This post was originally published on Andy’s Howard’s site ‘The Village of Useful’.

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