Rashida
Domino’s is America’s #1 pie maker, and the largest global pizza chain.
Impressive!
But Domino’s did not always have the largest share of the pizza market.
For years after their inception in the 1960s, they lagged behind Pizza Hut, and in 2009 their shares plummeted below $3.
How did they turn things around to become the pizza war winners and what is their plan to stay on top?
Buckle up, it’s time for another Content Cucumber marketing case study special.
The “Domino Effect” Disaster
First, we must understand the problems Domino’s was facing. Domino’s and Pizza Hut started around the same time in the 1960s, but Domino’s was always slightly behind the former pizza giant.
While Pizza Hut focused on an expansive menu and dine-in experience, Domino’s was built on delivery. From 1984 to 1994, their 30-minutes or less delivery promise helped set them apart. However, they were forced to drop it due to several lawsuits surrounding delivery driver car accidents.
In the ’90s, Domino’s began facing trouble with the rise of the rising crust frozen pizza market. Rising crust frozen pizza took a chunk away from the fresh pizza market, drastically heating up the fresh pizza wars.
By 2003, Domino’s faced flattening sales. They began cutting corners to keep the pizzas cheap. They turned to frozen, canned, and pre-made ingredients. The culmination of “small seemingly meaningless” ingredient changes added up for a collectively bad idea. Customer satisfaction dropped, and sales sank.
Admitting the Problem
When shares dropped below $3 and a video of employees tampering with food went viral, Domino’s knew it had to make a big change. Domino’s went back to the kitchen to reformulate its pizza. They also did something few brands do, they admitted the problem.
In late 2009, the brand launched an ad campaign that admitted their pizza had not been good for years. They showed and explained how they were correcting the issue and reformulating their pizzas. There was a snowball effect as Domino’s upgraded their quality and menu offerings, and they made a point to share this information openly and honestly.
Chipotle also had a similar strategy when sales fell 95% due to food safety issues. They pushed ads about sourcing ingredients from sustainable farms, and they marketed “Food with Integrity,” explaining how they changed protocols. They changed CEOs and gave away free burritos to gain the trust back from customers.
Admitting where you went wrong is always tough to do, but as a business, it goes a long way in getting the consumers’ trust and loyalty back. By fessing up to mistakes and demonstrating a commitment to change, both Chipotle and Domino’s were able to turn their businesses back around.
A Tech Company That Makes Pizza
Admitting their problem and demonstrating the solution through transparent marketing was absolutely essential for Domino’s but what has really separated them from the rest is their adoption and implementation of technology.
In 2008, they rolled out the revolutionary pizza tracker, so customers could follow the progress of their orders. 2014 marked the year Domino’s became the first to allow voice ordering on its app, and in 2016 they offered 0-click ordering. Just open the app and order your favorite pizza.
By 2015, HALF of all Domino’s orders were from digital channels, and 31% of all pizzas ordered online were from Domino’s! They’re also able to leverage technology to gather information on their customers in-house which is incredibly valuable for business decisions.
What’s Next?
In 2017, Domino’s overtook Pizza Hut as the market leader. Their stock has risen over 3,200% since 2010. Their dedication to honest change and adoption of technology has paid off.
But the competition is not over.
For the longest time, you could only get delivery from Chinese restaurants and pizza places. With the help of third-party delivery services, customers can now order delivery from many more restaurants.
Domino’s plans to continue focusing on tech and fast delivery. With in-house delivery, they don’t take the massive cut that other restaurants do when using third-party delivery. They want to revolutionize their delivery strategy by adding more stores to shave down the delivery time and implementing new delivery options.
Domino’s was the first to deliver with a remote-controlled aircraft (drone) in New Zealand. They’re already started to test self-driving cars.
Really, Domino’s is “a tech company that just happens to make pizza” and that’s what separates them. They’ll continue to put their spotlight on the marriage of technology and better pizza.
