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Domino's Pizza will be 50 years old in 2010. Yet for a company fast approaching its half-century, it's doing as much as it can to stay as fresh as the pizza it produces. It has fully embraced the digital sphere, with pioneering work in online ordering and red-button services. However, it has always remained loyal to its original goal: to deliver pizzas.
Much of this has been down to the fact that, ever since Domino's first store opened in Ypsilanti, Michigan in 1960, it has only ever been a home-delivery business. While many of its competitors, such as Pizza Hut and Papa Johns, are restaurants that have expanded to offer delivery as well, Domino's was always purely a delivery service. Indeed, it's often credited as being the chain that introduced the concept.
Domino's now has 8,000 franchised stores in over 50 countries, with 145,000 employees delivering, it claims, in excess of 1m pizzas a day.
Online's bigger slice
The UK plays an important role in the brand's structure. Launched in Luton in 1985 and now with 420 stores across both the UK and Ireland, Domino's in the UK has been at the forefront of the brand's digital operations since 1999. And its faith in digital is starting to pay dividends.
In the first half of 2006, online sales were up by 46.9%, now representing 12.3% of Domino's delivered pizza sales in the UK. In 2005, electronic orders increased 69.5% on the previous year (NMA 27.02.06). This year, seven years on from the launch of its transactional website, over £100,000 of total sales were made in a single night - a significant moment for the brand, according to Robin Auld, head of marketing for the UK and Ireland.
"It was a significant milestone for us," he says. "It had been teetering up that way week after week, but what's really positive about it is that the growth has come from repeat orders."
Auld explains that always-on connections are crucial to this growth. "I think the biggest single driver has been broadband penetration in the UK," he says. "It's a shift in customer mindset patterns, because if you're connected at home 24 hours a day, it can be quicker to order online than it is to pick up the phone and order."
Speed is central to the Domino's offering (see box, page 24). In its early days any pizza delivered after 30 minutes of the initial order being placed was free. Even though that offer no longer exists, records are still there to be set, and broken.
"It's probably one the quickest things you can order online and have delivered to your house," says Auld. "Outside of ringtones and other downloads, most things you buy online are delivered one or two days later if you're lucky, but more like three to five. With us you order online and it should be with you within half an hour."
Part of the success of the website - originally designed by AKQA and now maintained by Vexed Digital - has been its simplicity, says Auld. Rather than have people absorbed into a site full of content that distracts from the sales aspect, the ecommerce function of dominos.co.uk has to be the site's main focus.
"We did a lot of research and what came out of that was that people go online to order because they're hungry. There's no other reason," he says. "So the first thing that greets you now is 'Hungry?', and then it's straight to the good stuff: put your postcode in and start ordering.
"We deliberately stripped out all of the Flash, made it simple and straightforward, but retained that premium and contemporary look."
Auld says that making the ordering process as smooth and obvious as possible is crucial as there has to be a substantial benefit to ordering online over other methods - and, of course, competitors' offers - if the website is to be a success. "If this isn't, if it's just a novelty factor or flashy website, you won't get people coming back. You'll get all the one-hit wonders," he says.
Earlier this year Domino's announced a new promotional strategy using a range of above-the-line media to promote its web service. This featured 20-second TV ads showing two people arguing whether it was quicker to order by phone or via the internet (NMA 06.07.06).
Domino's also has a high-profile iTV strategy, in place with Sky since 1999. In fact, it took its first steps into interactive ordering back in 1998 on the Open TV platform. Red-button ordering currently accounts only for 5% to 8% of total ecommerce sales, but the long-standing relationship with Sky has allowed Domino's to push the boundaries in this sector.
Recently it added red-button functionality to its sponsorship of The Simpsons on SkyOne. The decision to do this wasn't just because of Sky pushing Domino's to try something new, but also Domino's pushing Sky to let them do it.
"The sponsorship of The Simpsons has been a great asset, both in terms of the timeslot [7-8pm every weeknight] and in the irreverence and fun of the show itself," says Auld. "Now, when the idents for The Simpsons come up, you can just press the red button and order straight away."
"Sky plays a big part in what we do," agrees Jane Kimberlin, Domino's IT director in the UK. "It's happy for us to try new ideas, so we're looking at what will work in that arena, such as with The Simpsons red-button ads."
Auld says that being the first advertiser to use red-button services in this way has helped Domino's build on its reputation as a company willing to push the boat out. "Quite often we're the first point of call, and not just from Sky but also media owners looking for someone to try something a little bit new or different, because they know we're not afraid to try new things," he says.
There are reasons for caution in some sectors, however. Online marketing, for instance, is one area that Domino's hopes to expand on in the future - "It hasn't always been a priority," says Auld - but the brand is conscious that it must focus on the right areas to get any positive reaction.
"The web is so huge that you can quickly spend an awful lot of money there. Not only does it have to be very targeted but it absolutely has to be delivering for you," says Auld. "We don't kid ourselves that we're that big an established brand online. There's the site, we do keyword search ads, affiliates, banner ads, pop-ups, but I think they only work as an integrated strategy balanced with offline as well.
"Historically we've spent a low proportion of our marketing spend on ecommerce, but this year marked a tipping point for us," he adds. "We created a new 20-second TV ad for our online platforms, we really embraced the World Cup, and we ramped up our email activity."
Football, like The Simpsons, is a natural fit for Domino's, according to Auld, and the company used this association prominently throughout the summer, starting with the Champions League final. Domino's ran online banner ads that incorporated a countdown clock telling people how much longer they had to place an order for it to arrive in time for kick-off.
Dan Clays, MD of Quantum, the media agency that plans and buys Domino's online ad campaigns, says that to maximise the chances of conversion you have to give someone a reason to buy online, beyond the creative message.
"There are ways, such as time-targeting, to generate a sense of urgency in your advertising for a client like Domino's, and the best way to do that is to associate with events that could be potential pizza-eating occasions," says Clays. "You then get the consumer to make that connection by giving them the right creative, at the right place at the right time. It could be Big Brother, Lost [tying in with the countdown clock featured on the show] or the Champions League Final."
On a football theme, Newcastle and England striker Michael Owen featured within Domino's TV ads throughout the World Cup; Domino's branding also appeared on his official site as part of the deal. "Visitors could win Domino's pizzas and Michael Owen products," said Auld. "This is the kind of strategic tie-up that we'll continue to do as our online focus intensifies.
"But I think that when people come to Domino's online they're just looking for pizza," he continues. "With offline, when we've done promotions that haven't involved pizza, they haven't done as well as those that are pizza-led. So while strategic partnerships will always remain important and relevant online, whether that's with the Yahoo!s and Hotmails of this world or smaller sites, they must always have relevance."
Clays says that the challenge isn't so much to push Domino's as it is to persuade media owners. He has a client that's not afraid to take a chance, but he must convince partners to do the same if the messages are to be effective.
"For a brand that's pioneering and successful online, we're very much encouraging media owners to try ideas that are more dynamic, that make different use of the assets that they're typically using to sell to their clients," he says. "That's quite hard, as some media owners are pushed for resources as it is. It's about getting them to think innovatively and use what should be the most dynamic media channel."
Auld says online marketing must support the entirety of Domino's offering, whether that's ordering by phone, in-store, online, through Sky or even via mobile. The fact that the UK has all of these channels available to customers is testament to how well the market has accepted them.
"In the UK we're quite a long way ahead of our rival sites," he says. "Domino's in the US doesn't have a transactional website, and in Australia it just started a few months ago. We're leading the way, with the exception of possibly Iceland, where there's a great ecommerce setup."
This isn't something that Domino's has taken from other cultures and markets, he continues. "The US is the lead market in terms of sales, but doesn't have an ecommerce setup. This has purely come from Domino's UK."
Domino's UK has a tight relationship with the US, says Auld, but while it may have to respect logo restrictions and brand guidelines, the UK marketing arm doesn't have to get approval for any of the new ideas it may have. Developing its own back-end technology to implement ecommerce techniques is part of this freedom, as well as developing what the consumers want.
And Domino's is benefiting from a positive public attitude towards technology. "People are much more technology aware now and much happier to order through whatever means are at hand," says Kimberlin. "They don't always think, 'I'd better phone up.' People don't necessarily like to talk to someone these days."
Consumers are now starting to trust technology more than perhaps someone they're talking to, she continues. "So you know yourself what you've ordered, be that via the web, TV or even text message, eventually."
Mobile is the digital area that Domino's hasn't quite cracked yet. It has a deal with Reporo where people with WAP-enabled phones can download software that allows them to order through their handsets, but this has had nowhere near the take-up of web or red-button ordering.
"We see mobile commerce as a great opportunity for us going forward, particularly among our 18-34-year-old target market," says Auld. Text ordering was supposed to be part of this, and an SMS service was originally slated for launch by the end of last year. Auld says there are clear reasons why, so far, nothing has been rolled out.
"It's very important that we get it right," he says. "One of the things that we have to look at, for example, is that most of the time you send a text to your friend and they get it straight away, but occasionally it doesn't arrive for 30 minutes. For a brand where immediacy is absolutely vital, that's a major issue we have to overcome.
"Innovation is all well and good, but it has to be right. If someone tries mobile ordering for the first time and it fails then you've probably lost that customer for a long time."
Kimberlin agrees. "We have to make sure that the technology is absolutely right," she says. The logistics of the business don't sit happily with what's possible on mobile platforms. "Everyone is individual and there are over a million combinations you can order, so it's difficult to get something straightforward into a text platform that incorporates all of that."
This means SMS ordering looks like an increasingly distant prospect. "Text ordering is the next step, but only when we have something robust to roll out," says Kimberlin. "I'm hopeful this might be within the next year."
Domino's strategy is to provide people with the ability to order whenever and wherever they are, says Kimberlin. Wireless and Bluetooth have been significant developments in this, and have already been implemented outside the UK.
"We're not into kiosk ordering, but why not?" asks Kimberlin. "It works well in other countries, in airports, shopping malls and even in our own stores. I'm going out to Australia to look at this, among other things that could work in our market. But they have to be right for the UK and Ireland."
Auld says that if Domino's can provide all these different ways to order then it must also find a way to integrate them for each individual user in a personalised service. "The ideal situation would be someone going to the website to order, which brings up their last three orders when they log on," he says. "One's a phone order, one's from online and one's a mobile order, because these are what happened to be the most convenient at the time.
"Consumers are very savvy at using the best things at the best time. The one principle we'll take into all these areas is to make it as quick and simple to order as possible. So if we are to look at a text messaging solution, it must be one that requires as few messages going back and forth as possible."
The future looks prosperous for Domino's. It estimates that by its fiftieth anniversary in 2010 ecommerce will account for almost 20% of overall sales, rising to 33% by 2015.
"Although we've prided ourselves on being first and innovative with digital over the past seven years, we have to keep that momentum going," says Auld. "So certainly between 2007 and 2010 there will be a steady and continuous increase in what we spend on marketing online.
"That'll be a combination of classic online paths and new, innovative things, whether it's the countdown clock for football matches or stuff with other sites," he adds. "It will involve talking to the portals and asking what they haven't done before, and working with agencies like Quantum to help take us forward."
1960 Domino's founded in Ypsilanti, Michigan
1985 First UK store opens 1991 First store opens in Ireland
1999 UK transactional website launched 2004 Website and interactive TV services relaunched. UK sales reach £174.3m, £8.2m via ecommerce
2006 Ecommerce sales up by 46.9% in the first half of the year, representing 12.3% of delivered pizza sales in the UK
Keeping the orders coming
With a delivery target time of no more than 30 minutes after an order has been placed, time is obviously important to Domino's operations. Making sure that this is achieved is made all the more pressurised by all the technology involved.
"With other operations where you order online, the timing isn't that important," says Jane Kimberlin, Domino's UK IT director. "The challenge we face is that if, say, the server goes down even for a small amount of time, for us it's critical. We need to get the order up on screen in the shop in no more than two minutes, so we can't afford for anything to go wrong."
Domino's servers are hosted at its UK head office in Milton Keynes, and all ecommerce orders are monitored by a manned helpdesk. The system highlights any orders that haven't been sent to the store, which are then phoned through. Likewise, any orders over a certain value are double-checked to ensure they're genuine.
Maintenance can be undertaken overnight while stores are closed. "If we want to trial anything or test it, we have the luxury that we're not a 24/7 operation," says Kimberlin.
Once the orders arrive in store, they appear automatically on screens at the head of the pizza's make line - something that can seem strange to a customer, says Auld. "You can be in front of the counter, seeing all the staff working away on lots of pizzas, but the phone's aren't ringing. That because orders are all coming from the website or red button."