Domino's Pizza is living as large as one of its new, fresh-dough pan pizzas these days, postingstrong domestic and international growth and planning to garner extra funds from franchisees for marketing this year to support its increasingly robust brand platform.
CEO J. Patrick Doyle has managed to get Domino's into a growth groove by relying on its increasing international presence, rising brand equity, expanding menu, store modernization and experimentation and an industry-leading digitization initiative. Same-store sales in both the U.S. and abroad were up by about 5 percent during the fourth quarter versus a year ago, Domino'sreported this week, and the period marked the 76th consecutive quarter of international same-store sales growth.
"The joy of pizza is that bread, sauce and cheese works fundamentally everywhere, except maybe China, where dairy wasn't a big part of their diet until lately," Doyle told brandchannel. "And it's easy to just change toppings market to market."
International operations are the biggest growth engine for Domino's also in part because the pizza industry faces U.S. saturation. The Ann Arbor, Mich.-based chain opened its 10,000th store last year, and the site was Istanbul.
In the U.S., though Domino's already is the leading pizza-delivery brand. Doyle is pursing a number of tactics for attempting to steal share from overall U.S. No. 1 Pizza Hut, No. 3 Papa John's and various regional and independent players.
They have included a complete remake of the brand over the last few years, starting with anadmission that the pizza didn't taste all that good, unfolding in a series of TV ads starring Doyle himself. Domino's new Handmade Pan Pizza is its first non-frozen entry in the segment, which is a strong area for its competitors. Also, Domino's and franchisees are testing new"pizza-theater" concepts in outlets around the country that feature an open view of the kitchen, big-screen TVs and a wall-to-wall chalkboard for patrons to scrawl their praises—or complaints.
Another important initiative is for Domino's to rely on what the CEO says is an industry-leading online-ordering capability, which is increasingly crucial for Domino's not only to compete with other major brands but to exercise a huge advantage over small outfits.
"It's a better customer experience," Doyle said about online ordering, which now comprises about 40 percent of Domino's orders in the U.S. and about 58 percent in the U.K. "Online is where people are and want to be anyway. They've got the whole menu in front of them. They can take their time in ordering without one of our guys on the other end of the phone line maybe sounding impatient. And the accuracy of the orders is higher."
"It's not just about [customers'] preference for a digital experience: They believe the pizza tastes better when they get it, too!"
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Friday, March 1, 2013
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