Description Tech with a Side of Pizza: How Dominos Rose to the Top - What did Domino’s do to tur ...
Description Tech with a Side of Pizza: How Dominos Rose to the Top - What did Domino’s do to turn around its performance? What were the company’s most significant innovation? 1 attachments Slide 1 of 1 attachment_1 attachment_1 UNFORMATTED ATTACHMENT PREVIEW For the exclusive use of p. du, 2023. 9 - 4 2 1 -0 5 7 REV: F EBRUARY 1, 2021 BORIS GROYSBERG SARAH L. ABBOTT SUSAN SELIGSON Tech with a Side of Pizza: How Dominos Rose to the Top “We wake up every morning, and see the problems in our business. And then we go after fixing them.” 1 — J. Patrick Doyle, Domino’s CEO, 2010-2018 Food delivery to parks and beaches. Voice ordering with the help of a friendly AI-generated chatbot named “Dom.” Award-winning advertising campaigns. These were a few of the innovations that transformed Domino's Pizza, Inc. (“Domino’s) into the world’s leading pizza business. 2 Headquartered in Ann Arbor, Michigan, Domino’s Pizza offered take-out and delivery pizza, selling 3 million pizzas a day via 17,200 stores in 90 countries. 3 Over the span of its 60 year history, Domino’s had experienced its share of ups and downs. In 2008, Domino’s share price had fallen below $3, and its pizza was the target of American late-night hosts’ wisecracks for being unpalatable and for a damaging viral prank video depicting employees tampering with its food. 4 But using technology, marketing, and a focused execution strategy, Domino’s executive team was able to turn the company around. In 2021, as the world struggled with the pandemic, Domino’s thrived. Pizza was, as one analyst suggested the "ultimate quarantine food: It travels well, can feed a whole family and holds up as leftovers.” 5 Following years of technology investments and a “fortressing" expansion strategy, which clustered locations to minimize delivery times/pick up drives, Domino's was uniquely positioned to take advantage of growing demand. 6 Domino's pioneered a number of ways to safely get food to its customers including "contactless" delivery, where the pizza was left on a cardboard pedestal outside of customers' homes, and contactless pick-up, with the food placed directly in the customer's car. 7 For the first nine months of 2020, Domino’s saw revenues increase by 12% and earnings increase by 25%.8 And in October, 2020, Domino’s share price hit an all-time high of $433.78. Despite strong 2020 results, the company still faced a host of challenges. The quick service pizza market was mature and highly competitive. The rise of third party delivery services had expanded food delivery options—making inroads into Domino’s top-line growth rates. How did Domino’s get from where it was in 2008 to its position as industry leader today? What lessons could be learned from HBS Professor Boris Groysberg and independent researcher Susan Seligson prepared the original version of this case, "Tech with a Side of Pizza: How Dominos Rose to the Top," HBS No. 421-035. This version was prepared by Professor Boris Groysberg, Research Associate Sarah L. Abbott and independent researcher Susan Seligson. Funding for the development of this case was provided by Harvard Business School, and not by the company. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2021 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to www.hbsp.harvard.edu. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School. This document is authorized for use only by phuong du in IMS 4320 taught by SEUNG-HYUN LEE, University of Texas at Dallas from Aug 2023 to Feb 2024. For the exclusive use of p. du, 2023. 421-057 Tech with a Side of Pizza: How Dominos Rose to the Top the company’s dramatic turnaround? And, in light of competitive industry dynamics, what could Domino’s do to sustain its success? Industry The first appearance of pizza dated back to ancient Rome, but the origins of modern pizza were found in 18th century Naples, Italy. 9 During the late 1800s, four million immigrants arrived in the United States from southern Italy bringing this traditional Italian peasant food with them. 10 In 1905, Gennaro Lombardi, a baker from Naples, opened up the U.S.’s first pizza restaurant in Little Italy in New York City.11 Pizza was brought into the mainstream in the 1940s, when GIs stationed in Italy came home looking for the pizza they had discovered during World War II.12 The 1950s saw the rise of frozen pizza and with the increased prevalence of cars, delivery pizza emerged in the 1960s. 13 The post-World War II era also saw the rise of the fast food or quick service restaurant (QSR) industry, dining businesses that provided food quickly and offered minimal (if any) table service. White Castle, the U.S.’s first fast food chain, opened in 1921 in Kansas, and the McDonald brothers opened their first restaurant in 1948. Burger King and Taco Bell opened in the 1950s. 14 By 2020, the U.S. QSR industry generated an estimated $240 billion in sales. 15 (See Exhibit 1 for a list of the largest QSR businesses in the U.S.) The QSR business’s largest segments included: burger, chicken, pizza, and snack. The pizza segment had seen U.S. sales grow from $34.8 billion to $37.8 billion between 2014 and 2019 (a 1.7% CAGR), 16 and by 2019, Americans consumed more than three billion pizzas annually. 17 This included take-out, dine in, and delivery pizza. In 2019, the delivery segment of the market generated $11.0 billion in sales, 29% of the total market. 18 The carryout segment generated $18.8 billion in sales. The four industry leaders, including Domino’s, accounted for approximately 61% of the pizza delivery market and 51% of the carryout segment. 19 The other three were Pizza Hut, Papa John’s, and Little Caesars Pizza. The pizza segment was the least consolidated of the primary QSR segments—the five leading burger chains comprised 80% of the market and the five largest Mexican restaurants accounted for 70%. 20 As of year-end 2019, Pizza Hut had 18,703 units, 61% of which were located internationally. Pizza Hut was the largest pizza company in the world based on number of locations. 21 The business generated $1 billion in revenues and $369 million in operating profit. 22 99% of units were franchised. Pizza Hut had been closing its dine-in stores in recent years due to poor performance 23 but still had significant exposure to the segment, particularly internationally. In 2020, 700 Pizza Hut units were closed globally, and more than 50% of closures were dine-in locations. Still, 36% of total units were dine-in. 24. Chris Turner, CFO of Pizza Hut's parent company, YUM brands, commented, “We still have a lot of work to do on transitioning the global asset base to off-premise-focused assets.”25 As of year-end 2019, Papa John’s had 5,395 units. Papa John's U.S. stores generally ranged in size from 900 and 1,400 square feet. However, some international units were larger with limited in-store seating. The company had 5,395 units in 49 countries and territories. 2019 revenues totaled $1.6 billion. All international and 92% of North American units were franchised. 26 Little Caesars was founded in 1959 and had locations in 25 countries and territories globally. The typical Little Caesars store was 1,400 - 1,600 square feet in size. 27 Little Caesars was privately owned 2 This document is authorized for use only by phuong du in IMS 4320 taught by SEUNG-HYUN LEE, University of Texas at Dallas from Aug 2023 to Feb 2024. For the exclusive use of p. du, 2023. Tech with a Side of Pizza: How Dominos Rose to the Top 421-057 by its founders, the Ilitch family, and generated estimated system sales of $3.8 billion a across just under 4,300 units.28 The company utilized a franchising model. In recent years, the QSR market had been impacted by the rise of third party delivery services. In the past only companies with their own driver networks could offer delivery to their customers. However, with third party delivery services, consumers' choices were greatly expanded. DoorDash was the largest of these companies, with a 51% market share. Uber Eats had a 23% market share, GrubHub 18%, and Postmates 7%. 29 These companies had various regional strengths (e.g., GrubHub was strongest in the northeast), and customers were generally not loyal to a particular service but regularly shifted between providers. 30 Delivery services charged commission fees of approximately 25% of the sale value to restaurant customers. 31 Despite the costs, many restaurants signed on as a way to grow their market share. Some restaurants signed exclusive deals with a single delivery provider, but most listed with multiple services. Pizza Hut, Papa John's, and Little Caesar utilized their own delivery drivers and also were available via Grubhub 32 and DoorDash 33—arguing that these services provided access to a different demographic and helped them to maximize sales during peak delivery times. 34 However, Domino's eschewed all third-party services, choosing to stick with its own driver network. Ritch Allison, who was named Domino's CEO in 2018, commented, “We’re not going to do foolish things, you know, in the short term in reaction…We’re still very focused on our franchisees’ profitability — that’s first and foremost in our minds — and still very focused on generating great returns and free cash flow for our investors.” 35 Allison also argued that the third-party delivery model remained uncertain as many of these companies were offering free or subsidized delivery and losing money. Investors were willing to accept losses in the short-term as these companies fought to win market share. “We don’t know how that’s going to shake out once consumers actually have to pay the full cost of that delivery because those fees are quite substantial, relative to the cost of the underlying food…I think we also have not yet seen what’s going to happen with the supply of restaurants on these platforms as well,” he commented. 36 However, in the near term, third party delivery seemed to be eating into Domino’s sales. One analyst estimated that 20%-25% of Domino's sales were in markets where third-party delivery services were already present or expected to launch soon, 37 and in 2019 the company had revised down its same-store sales targets from 3-6% to 2-5% due to increased competition. b, 38 Outside of the U.S., the QSR industry was characterized by relatively faster growth. The international QSR pizza segment was an estimated $100 billion in size, growing at 4% annually. Chains were expected to drive the bulk of this growth, and carryout and delivery pizza were projected to grow faster than the overall segment. 39 The international QSR pizza industry was similar in size to the quick service burger and chicken segments. However, the pizza industry was relatively less dominated by chains. Outside the U.S., 27% of pizza units were part of a chain compared with 53% of chicken units and 66% of burgers units.40 Company History In 1960, Tom and James Monaghan borrowed $900 to buy DomiNick’s, a pizza store in Ypsilanti, Michigan. Tom bought his brother’s interest the following year and renamed the business, Domino’s a Because Little Caesar and other QSR businesses utilized a franchising model, sales from franchised units were not included in the company’s revenues. b Same store sales growth is calculated including only sales from stores that also had sales in the comparable period of the prior year. It is a standard industry statistic for measuring top-line growth. 3 This document is authorized for use only by phuong du in IMS 4320 taught by SEUNG-HYUN LEE, University of Texas at Dallas from Aug 2023 to Feb 2024. For the exclusive use of p. du, 2023. 421-057 Tech with a Side of Pizza: How Dominos Rose to the Top Pizza. 41 In 1967, the first Domino's franchise store was opened. 42 Monaghan used a franchising model to grow the business; franchisees were given the right to use the Domino’s brand, in return for which the company collected royalties, calculated as a percentage of sales. By 1983, there were 1,000 Domino’s stores. 43 In response the company’s rapid growth, Monaghan oversaw the construction of Domino's Farms, a new headquarters in Ann Arbor, MI that measured nearly 1 million square feet. 44 In 1984, Domino’s famously advertised free pizza to customers if their order was not delivered in 30 minutes or less. (The guarantee was only in place for a few years but was remembered long after.) 45 Domino’s kept its menu relatively simple and avoided too many new product launches. 46 This was in contract to competitors such as Pizza Hut, which viewed menu innovations such as the stuffed crust pizza as a critical tool for driving sales. 47 In addition to pizza, Domino’s offered chicken wings, salad, desserts and bread. Doyle commented, “The standard playbook in the restaurant industry has been this constant flow of new products, most of which do not change your typical customers’ experience at all” 48 And longtime Domino’s executive Russell J. Weiner added, “"Fast food marketing is designed around product of the month with a price special…How good can your pizza be if you have to change it every month and if you have to price it differently every month?” 49 By 1998, Domino’s had grown to 6,000 stores. 50 Monaghan sold 93% of the company to Bain Capital for approximately $1 billion in a leveraged buy-out and retired as CEO. 51 David Brandon, Domino’s new CEO, overhauled the senior management team and revamped its store design. 52 Domino's had opened its first international store in Canada in 1983 and by 2003 had 2,500 stores located outside the U.S. 53 By 2004, Domino’s was the leading pizza delivery company in the U.S.,54 and the company completed an IPO in the midst of a choppy equity market. Analysts touted Domino’s “established brand, simple and cost-efficient operating system, and improved profitability.” 55 But they also raised concerns about the competitive marketplace and Domino’s relatively high debt levels. By this point, Domino's operated three business segments. Its U. S. Stores segment consisted of both franchised and company-owned stores. The company argued that directly owning and operating stores contributed to its “ability to act as a credible franchisor” and these stores were used for training and as “test sites for technological innovation and promotions as well as operational improvements.” 56 Domino’s average U.S. franchisee owned and operated seven stores and had been in the Domino’s system for more than 18 years. Franchise agreements were 10 years in length with a right to renew for another 10 years. The company had a contract renewal rate of close to 99%. 57 Franchisees were required to have a year’s experience managing a store and have attended Domino’s franchise management school program before being granted a franchise. U.S. franchisees paid a 5.5% royalty fee and technology fees to Domino’s. They also paid a marketing and advertising fee equal to 6% of sales. These aggregated advertising funds were administered by Domino’s National Advertising Fund Inc., a notfor-profit subsidiary, and used to purchase advertising and conduct market research. U.S. franchisees supplemented national advertising with their own local marketing activities. 58 Domino’s international business included its franchised stores outside the United States. International revenues were comprised primarily of royalty payments. In international markets, Domino’s utilized a master franchise model. The master franchisee was given exclusive rights to a particular market, which they then could build out via opening their own stores or via sub-franchise arrangements. This business was highly profitable for Domino’s —no cost of sales and minimal administrative expenses were required to support business. Allison explained, “The great thing about our business model outside the U.S., we have international master franchisees. They’re locally owned. They employ the local citizens, and we buy almost all of our ingredients locally as well."59 Domino’s 4 This document is authorized for use only by phuong du in IMS 4320 taught by SEUNG-HYUN LEE, University of Texas at Dallas from Aug 2023 to Feb 2024. For the exclusive use of p. du, 2023. Tech with a Side of Pizza: How Dominos Rose to the Top 421-057 third segment was its supply chain business. The company sold ingredients to all U.S. and some international stores. 60 In the years that followed Domino’s IPO, while its international business continued to grow (benefiting from less saturated markets), its U.S. business faltered. 61 Part of this was industry-driven, between 2003 and 2009, delivery pizza sales in the U.S. declined by 2.2%.62 Delivery pizza lost share to frozen pizza, and other quick service food chains, including burgers. 63 The great recession of 2008-9, and the accompanying decline in consumer spending, only added to the challenging operating environment. 64 Major pizza chains responded by cutting prices. “The competitive environment has heightened as consumers have hunkered down,” explained Brian Niccol, Pizza Hut's marketing head. 65 And one analyst commented, "In this environment, restaurant operators need to focus on traffic…If you're not getting the traffic, you don't have an opportunity to upsell."66 While Domino’s had continued to lead the industry in terms of low price, Pizza Hut and Papa John’s had tightened that gap. 67 Domino’s was also receiving poor feedback on the taste of its pizza. One customer survey had Domino’s in first place on price but tied for last in taste. 68 Domino’s same store sales turned negative in 2006, 69 and the company's share price declined from its IPO price of $13.50 to $2.83 in late 2008. In 2004 Domino’s had generated $1.5 billion in revenues. By 2009 revenues had fallen slightly to $1.4 billion. (See Exhibit 2 for Domino's share price performance through 2008.) The Turnaround 2009-2011 As the U.S. emerged from recession, Domino’s executives focused on turning the business around. Brandon commented, “We did a good job of anticipating the economic downturn in the U.S. and we cut costs before the economy weakened. We have been intensely focused on controlled overhead spending throughout the past three years. As a result, we are now in a position to invest in our business; invest in our franchisees; invest in our marketing; invest in our technology; and expand our global footprint.” 70 In 2008, at the company’s annual strategic planning meeting, Brandon and his team decided to rework the pizza recipe, something that hadn’t been done since the company was founded. Tweaks had been made along the way and in the 1990s the company moved from eight slices to 10, but that was it. 71 Doyle commented, “You can either use negative comments to get you down or you can use them to excite you and energize your process and make it a better pizza. We did the latter.” 72 Weiner explained the process: We dissected our pizza, then reinvented it from the crust up. We tried scores of different sauces, cheeses, and doughs, with the idea of improving each of them. In each case, the market research found that the new elements recorded double-digit improvements in terms of purchase intent. And we didn't stop there. While we knew which individual components tasted good, we had to make sure they worked together. I always say that two good-looking people can make an ugly baby; ingredients that work well by themselves can fail in combination. So you have to make sure that all the elements taste great together. 73 5 This document is authorized for use only by phuong du in IMS 4320 taught by SEUNG-HYUN LEE, University of Texas at Dallas from Aug 2023 to Feb 2024. For the exclusive use of p. du, 2023. 421-057 Tech with a Side of Pizza: How Dominos Rose to the Top Domino’s launched the new pizza by offering two medium pizzas with two toppings for only $5.99. 74 Weiner worked with the company's advertising agent to develop a marketing campaign that capitalized on the new recipe. The ads showed consumers reacting negatively to the old Domino’s pizza—one customer called it “totally void of flavor.” 75 Those customers were later revisited with the new pizza, which received rave reviews. The ads featured the tagline, “Oh Yes, We Did.” 76 Domino’s launched an "Oh Yes We Did" page on its website featuring a documentary video that chronicled customer dissatisfaction with the old pizza through to the introduction of the new one. The site also had live feeds from Twitter and Facebook, with customers sharing their reactions to the new pizza.77 Ad Age called this campaign “radical authenticity,” and argued that the honesty resonated with consumers. 78 Doyle commented, “We’ve always been the best at delivery and been given credit for it by consumers…We’ve always been viewed as providing good value to the consumer. We were not given credit for great-quality food.” 79 Domino’s 2010 “Pizza Turnaround” campaign won the David Ogilvy Award for Excellence in Advertising. 80 Another piece of Domino’s transformation was technology. In late 2008, Domino’s introduced a new point of sale (POS) system known as PULSE. PULSE was a proprietary POS system that included touch screen ordering, a delivery routing system to maximize efficiency, administrative and reporting functions (including inventory management and staff scheduling), and an online ordering system that included the Pizza Tracker and Pizza Builder, which allowed customers to personalize their online orders. All U.S. stores were required to utilize the PULSE system, and Domino’s offered the system for sale to international franchises. 81 The decision to require U.S. franchisees to purchase Domino's system was controversial. Some franchisees argued that they wanted the ability to select their own system and a number of them sued the company to maintain this right. (They lost.)82 In hindsight, Kevin Vasconi, chief information officer, argued that implementing PULSE across all stores was “maybe the most important technology decision made in the last decade at Domino’s.” 83 With a single system operating across the network, Domino's was able to seamlessly add on new functionality and new platforms going forward—rather than trying to make these add-ons work with multiple technologies. 84 Domino’s employees received training on all aspects of pizza preparation—from assembly to cooking in automated ovens to boxing to delivery. The order-taking and pizza preparation process was designed to be completed in 12-15 minutes. 85 Domino’s Pizza Tracker allowed customers to enter their phone number into the Domino's website and see exactly how close their pizza was to being delivered—a tool that the company promised was accurate within the 40 seconds. Domino's technology executive Chris McGlothlin explained, “We’re filling that black box of uncertainty — ‘Has my pizza been forgotten?’—with information and entertainment.” 86 And Weiner added, "Pizza Tracker is about tracking the progress of your pizza, but it’s also the ultimate in accountability and transparency.” 87 In 2009, Domino's restructured its IT department, hiring 30 tech professionals to bulk up its IT capabilities and move IT functions in-house. “We thought the importance to our business and the criticality of the technology was too great to continue to outsource it,” McGlothlin explained. 88 In 2010, the company launched its proprietary online ordering system, 89 and announced its goal of increasing digital sales from 20% of total to 50% by 2016. Weiner commented, “What we saw then and continue to see now, is consumers prefer digital ordering over any other type…It’s got better repeat, higher spending, customer satisfaction is higher, they order new products at a two-to-one ratio, and then there’s all the data to learn from.” 90 Domino's marketing and technology groups worked together in order to reinforce the company's image as an innovator. Dennis Maloney, chief digital officer, explained, “The two groups work through everything…They spend a ton of time together. They’re closely integrated and work hard to maintain that relationship.” 91 6 This document is authorized for use only by phuong du in IMS 4320 taught by SEUNG-HYUN LEE, University of Texas at Dallas from Aug 2023 to Feb 2024. For the exclusive use of p. du, 2023. Tech with a Side of Pizza: How Dominos Rose to the Top 421-057 In 2011, Domino's introduced a line of artisan pizzas. These pizzas had higher-end ingredients such as spinach and feta and were sold for $7.99 for two pizzas. Doyle commented on the higher price point, "Good value is still required to bring consumers in…I don't think the economic pressure has eased, and you still have to be very careful about raising prices, but consumers are saying there is no value in poor-quality food, no matter what the price is." 92 Domino's also continued to focus on its international markets. In 2012, the number of international stores surpassed U.S. stores for the first time. The company estimated that it had only an 11% share of off-premise pizza sales outside the U.S., leaving significant opportunity for growth. 93 In 2009, after three years of negative same store sales in the U.S., Domino’s saw same store sales increase by 0.5%. In the first quarter of 2010, following the introduction of Domino’s new pizza recipe, the company posted a record 14% same store sales growth, 94 and for full year 2010, they increased by 9.9%. 95 (See Exhibit 3 for annual same store sales data.) Operating and gross margins also improved.96 Doyle commented, “Weak companies just kind of hunker down in the bad times and hope that the bad times will pass. As we saw results getting tough, we got very aggressive about making changes to this business that we thought were going to set us up for great long-term success.” 97 In 2010, Doyle took over from David Brandon as CEO. 98 Brandon remained the company’s chairman. 99 See Exhibits 4a and 4b for company financial and operating data through 2011. See Exhibit 5 for Domino’s share price performance. 2012-2018 In 2012, Domino’s launched a new handmade pan pizza. Pan pizzas comprised an estimated 20% of the U.S. pizza market, and Domino’s had lacked a presence in the space. The launch was accompanied by a national ad campaign, with two two-topping pizzas sold for $7.99. 100 Domino’s also launched its “Pizza Theater” store design in 2012. The new format allowed customers to watch their pizzas being made while they waited. All stores were required to remodel and adopt this new format. 101 Brandon Solano, vice president of store development, explained the rationale for the new design: “Consumers are changing…They want greater transparency in the cooking process; they want to be a little closer to the food, to where it comes from. That's what our research showed us, and we really wanted our stores to reflect where consumers had gone, where our brand had gone. When we look at our old stores, they don't reflect that vision.” 102 The focus on technology continued, and G&A spending (a large percentage of which was IT investment) increased by $8 million and $16 million in 2012 and 2013 respectively. 103 In 2013, Domino's launched a Windows Phone 8 app with voice capabilities. With this product, Domino's had apps available for 95% of smart phones in the U.S. market, and online ordering had grown to 35-40% of U.S. orders. 104 “The faster we can push it, the better," explained Doyle of ongoing efforts to grow Domino’s digital business. 105 The company also launched Think Oven, a Facebook-based platform that allowed customers to communicate with the company. The Think Oven included the Idea Box (basically an online suggestion box) and Current Project. Current Project solicited customer ideas on topics such as new uniforms, with the winning idea rewarded with $500. The idea with these initiatives was to continue to engage with the customer as Domino’s had done with the launch of the new pizza recipe. Tony Calcao, an executive with Domino’s ad agency CP explained, “Domino’s is a brand that’s all about listening,” he says. “When we launched ‘Pizza Turnaround,’ we listened to our customers about how they felt about the pizza, and we changed the pizza. We’ve tried to maintain that with every campaign.” 106 7 This document is authorized for use only by phuong du in IMS 4320 taught by SEUNG-HYUN LEE, University of Texas at Dallas from Aug 2023 to Feb 2024. For the exclusive use of p. du, 2023. 421-057 Tech with a Side of Pizza: How Dominos Rose to the Top In 2013, Domino’s launched Pizza Profiles. This allowed customers to save their personal details and favorite order digitally to easily reorder. Weiner explained, Profiles are the ultimate in easy ordering–you can order a pizza in five clicks or 30 seconds. Think Oven says we listen to consumers and we want their feedback. So these are all digital ideas or tools, but are based in a brand philosophy that goes much deeper. The idea of being honest and open is something all consumers want whether they use our pizza tracker or not. 107 In 2014, “Dom,” a voice-controlled ordering assistant that was embedded in the company's iPhone and Android mobile apps was launched. By the end of the year, 500,000 orders had been placed via Dom. 108 Dom's launch was accompanied by an ad campaign with the tagline, “Introducing or newest employee...Dom.” The campaign included TV ads, online videos, and social media content. There was also a “Dom is Sorry” feature, apology cards mailed to early Dom customers who had a negative experience. 109 The hype surrounding Dom helped Domino's reach its goal of 50% of all orders being placed digitally. 110 Maloney commented, “We’re starting to think of ourselves as an e-commerce company that sells pizza…E-commerce companies move fast and launch stuff and learn along the way.” 111 Domino's also launched AnyWare, a suite of tools that allowed customers to order from a wide range of platforms including via text, smart TV and smart watches. The launch of Domino's AnyWare was accompanied by a major advertising campaign. Each new ordering channel (e.g., Twitter) was announced with a dedicated press release. 112 One JP Morgan analyst described Domino's as “a technology company disguised as a marketing company disguised as a pizza company.”113 Another analyst commented, “We largely view the AnyWare platform as a marketing tool to maintain relevancy and generate new news, with limited sales mix likely generated from a tweet or Facebook message.” 114 With all of these new initiatives, Domino’s marketing strategy continued to be closely linked to its technology strategy. “What technology and e-commerce allows you to do is make marketing decisions that are more informed by data…We do a lot of A/B testing, and while marketing still has a bit of that gut-feel fluffy part, the digital side has allowed us to bring a lot more science to it. If we decide to change our homepage tomorrow, it’s not just because I feel like doing it, it’s because it’s been A/B tested and we know our franchisees are going to make more money because of it,” explained Weiner.115 At a 2015 industry conference, Doyle described Domino’s core beliefs as “Opportunity; Hard work; Inspired solutions; Winning together; Embracing community; [and] Uncommon honesty.” 116 Doyle also highlighted the importance of encouraging employees to try new things. “It makes it a lot more fun to work for a company that is trying things, that is doing things…We love mistakes. It’s an important part of moving the business forward.”117 By 2015, one-third of the 200 employees based at Domino’s headquarters worked in technology. 118 Vasconi explained that Domino’s emergence as a tech-savvy brand was helping the company attract new talent. "Recruiting was a major challenge three years ago, and for the caliber of people we want, it’ll probably always be a challenge…However, with the strength of our brand and our focus on technology innovation, we are now attracting the right people and in the right numbers.” 119 The Piece of the Pie Rewards loyalty program was launched in 2015. When customers spent money at Domino’s they earned points that could be redeemed for free pizza. Members also received exclusive discounts. Members earned 10 points on online orders of over $10—60 points could be redeemed for a medium pizza. 120 Domino’s also launc
