“If I could eat whatever I wanted every day, I would have Domino’s pizza with pasta carbonara inside every slice.”
-CEO: Richard Ellison
Business Model Innovation
E-commerce and micro-logistics
Domino’s has been a household pizza brand in most of the developed and emerging world for the last 3 decades.
Domino’s has clearly demonstrated its commitment to digital transformation. Firsts like drone delivery, mobile-based consumer ordering, voice assistant, artificial intelligence, and augmented reality have transformed the market. Additionally, the company has rolled out digital-first apps in 7 out of the 9 major global markets it operates in.
The company’s e-commerce system now books over 65 million orders per year. Mobility has been a game changer for the company to scale up sales and reach previously unserved customers. The power of digital transformation is now visible with 65 percent of the total sales in FY19 coming from digital.
The Firm’s Mantra – Keep customers at the centre of their technology and make every touch point seamless.
The firm’s employee roster now constitutes 50 percent technology employees. These people come up with out-of-the-box solutions, and the firm creates an agile bridge between marketing, leadership and technology to ensure buy-in of new technology ideas and secure funding as well as market positioning.
Firstly, partnerships with food aggregators like Grubhub, Door Dash, and Uber Eats is the firm’s next disruption target. These companies, funded through a lot of free money, are leveraging their deep discounting strategies to attract customers and charging restaurants a fortune to ensure access to customers.
Secondly, Domino’s next step in achieving digital disruption is by owning the customer experience end-to-end via taking the delivery part in its fold. Working with aggregators in managing the delivery not only keeps them from controlling and managing the customer experience but also negatively impacts the operating margins because the delivery cost is substantial relative to the price of the underlying food.
Also, the firm is using digital transformation in pizza delivery by experimenting with robotic machines in one of its stores in Houston and based on data and analytics, it will roll out this delivery in all stores across the US.
The company intends to be off these aggregators and subsequently owning up delivery end-to-end. Perhaps, a first mover advantage in delivery technology is the next big frontier for Domino’s and it may additionally open doors to solve the micro-delivery puzzle at scale and create significant value tomorrow by no longer sticking to pizza as the only item to deliver.