The Dominos Effect

Faris
Faris
Mar 5 · 6 min read

Is Dominos a pizza company, a tech company or a delivery company?

Snacking on some television over the pandemic I experienced a pleasing shock of recognition when I noticed that Dominos was using an insight my wife had spontaneously expressed a few days before. We have mostly been cooking this pandemic, which is great but, like anything, gets boring when it is the only choice you have. Nothing is the best thing when it’s the only thing.

We began to cautiously order some ‘date night’ meals from well-regarded establishments in whatever city we were in. They were disappointing, and Rosie pointed out that even good restaurant meals end up being merely ‘premium mediocre’ once they get to your dining table.

“Why do you think delivery pizza is a thing?” I said, stroking my beard obnoxiously. Pizza is ‘delivery stable’.

VO: “What does Dominos know about tacos and burgers? As delivery experts [my italics] we know they shouldn’t be delivered like this!”

Cue social media shots of terrible looking burgers and tacos that were delivered. Announce new taco and cheeseburger pizzas thorough surprise and delight. Cue footage of pizzas delivered to previously disappointed fast food customers.

‘Designed to be Delivered’

Context is ultimately the most significant determinant of human behavior since we can only make choices from the set of available possibilities. The whole last year has been a dramatic shift in context that has forced change-resistant humans to do some things differently. As with any large changes, there are beneficiaries as well as victims — and chance favors the prepared.

Office employees, and employers, who are comfortable on Zoom and familiar with collaboration technologies for working remotely have a competitive advantage, one that will subsist until everyone is able to work from wherever [WFW™].

Corporations with empowered teams and localized decision-making can act more easily in conditions of ongoing uncertainty. Epistemic [knowledge-seeking] and opportunistic actions, limiting commitments but learning and capitalizing where possible, are one approach to overcome the analysis paralysis that sets in when all bets are off.

One big change initiates others in an inevitable cascade but don’t necessarily determine its direction. Companies with robust e-commerce businesses have been able to capitalize on the rapid growth in that channel. The best time to prepare for anything is before it happens, and Dominos has been preparing for over a decade.

Dominos announced their ‘Turnaround’ in 2009 with new recipes but behind the scenes more important changes were rolling out. Dominos were early in embracing technology at the core of their offering, rather than in some standalone department. As a DTC brand before those initials meant anything, they gleaned a deep and important insight, one which is only hinted in the current commercial.

A lot of prepared food doesn’t travel well but underneath is an abstract point, intuited by digital businesses all along — that what you sell isn’t what your customers are buying.

When we go to a restaurant, we pay for an experience that allows us to not worry about meal planning, shopping, cooking or washing up — and allows the provider to ensure the quality of the food until it gets to us. When we order take-out we have different needs, which changes the value equation. Delivery food needs to be ordered easily and good when it arrives. Ordering from a fancy restaurant seems expensive because the experience has been stripped away and exquisitely plated meals don’t keep on the back of a bike.

By 2014 Dominos had begun to describe themselves as a ‘technology company’ because “a commitment to data and transparency not only changed the brand’s marketing approach, but the whole company”.

This is also a piece of marketing, a positioning statement aimed at investors, who reliably allow technology companies stock prices to achieve massive multiples, something they don’t do for restaurants.

Everything is PR
But it works! That’s more than Google and Apple. I know!

Innovations like the Pizza Tracker, a real time representation of your pizza’s progress, provided a rich seam to mine for advertising and PR, whilst the stock enjoyed gains more in line with the technology sector. It’s not the pizza, it’s the ease of ordering, any way you want: picking toppings without having to laboriously explain them on the phone, having previous orders available. Then there’s the additional confidence: seeing when the order is en route, knowing it will be tasty when it arrives and not needing to have cash or change for a tip, or manage that potentially awkward social interaction.

What Dominos embraced was customer experience as a holistic approach to marketing and operations. The whole organization innovated in ways that forced the entire category to change around it.

Digital creates a blurring between products and services. What Dominos does better than anyone else is delivery, so it delivers that service through products. It can compete across the customer experience chain because it invested in it. Local pizza joints can’t and Pizza Hut, and Papa Johns, outsource delivery to GrubHub, and DoorDash, respectively.

Dominoes relies on its own delivery infrastructure, which positioned it to capture even more than its market-leading fair share of our increased appetite for eating from home [EFH™]. Pizza is the fastest growing segment and US sales for Dominos were up 16% in the first half of this year. Dominos commands 50% of the online pizza market. Only 1% are ordered through food delivery apps, per Edison Trends. Who delivers your product, and how, can be as important as what they deliver, and this applies beyond dinner.

Companies like Amazon and Uber have changed customer expectations and forced brands to change around them. Why can’t I see where my car is? Why should I pay for postage and packing? These companies are pure customer experience — they aren’t selling the things you buy through them. Rather, what you buy from them is how, which gives them control of various aspects of the customer experience.

Innovators capture outsized gains by shifting the expectations of the market in their favor. Customer experience can’t be a point of consistent competitive advantage if a company relies on partners to deliver it. The company has surrendered the ability to design the end to end customer experience [E2ECX™] and sometimes the ends matter most.

However, productized solutions can help companies that can’t afford to compete directly from falling behind. A new service called Malomo is hoping to help plug one of these gaps. Malomo integrates with Shopify, allowing small businesses to offer their own custom, branded tracking pages, just like Dominos. Structural innovations continue to spread if they are useful and desirable until they become hygiene requirements.

E-commerce is still only a tiny segment of any large business, although usually the fastest growing, and the economics are far more complex, sometimes to the point of unprofitability, than Amazon would make it seem.

Most companies don’t think delivery is what they sell but increasingly it’s going to have to be. Amazon realized that books are fungible so they competed with bookstores on choice, discovery, and logistics. The bookstores eventually noticed the tiny blip of e-commerce sales. Barnes & Noble mustered the motivation to compete, with online sales and the ill-fated Nook. Borders didn’t want to become a delivery expert and outsourced it to Amazon. By the time 20% of book sales had migrated online, Borders had announced bankruptcy.

Adapted from an article for WARC.

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Faris

Written by

Faris

Hello! I'm Faris. I'm looking for the awesome. Founder/Genius Steals. Itinerant Strategist//Speaker. Author of Paid Attention.

The Shadow

We publish inspiring stories about different topics for a productive and entertaining life

Faris

Written by

Faris

Hello! I'm Faris. I'm looking for the awesome. Founder/Genius Steals. Itinerant Strategist//Speaker. Author of Paid Attention.

The Shadow

We publish inspiring stories about different topics for a productive and entertaining life

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