Since 2012, Domino's Pizza generated a higher return on investment than Amazon, Apple, Facebook & Google. Since IPO in 2004, $1,000 invested in Google would have generated than a $54,001 return. $1,000 invested in Domino's would have generated $65,177 as of February 21st, 2022.
Domino's Pizza is still a brick & mortar business, with 65% of their business from eCommerce, while 35% is from inbound phone & walk-in traffic. So what is the big deal with Domino's doing business online? Papa Johns, Marco's Pizza, Little Caesar's and Pizza Hut all have online websites. They all take those orders, and deliver pizzas. But like Car Dealerships, the level of execution between different franchises and brands are sometimes drastically different. So how did Domino's share value rise from $13.80 to a recent high in December 2021 of $564 per share?
Pizza Hut’s slogan clearly states that, “No one out-pizzas the Hut”. Well, that obviously means different things to different people. If you were speaking with company shareholders, Domino's DEFINITELY “out-pizzas” the Hut. It's also important to understand how Domino's used transparency, technology and innovation to become the dominant provider of pizza in the world. It is said that, "If we fail to remember the past, we will be forced to repeat it." Pizza Hut & Papa Johns were the dominant force in the industry, and their failure to control their customer data, continue to innovate and pay attention to changing consumer behaviors was a very expensive decision. The most expensive decision was choosing not to make a decision for digital transformation, until it was far too late.
It is said that, "If we fail to remember the past, we will be forced to repeat it."
Domino's Pizza values aren't that complicated, but they are difficult to execute.
A turnaround like the one in the video above sounds great, but change management is extremely difficult. Changing legacy systems & mindsets, allocating funds for expenses that do not immediately generate ROI, adding elements of gamification to their training, and publicly admitting that their quality was lackluster at best is not for the faint of heart. It takes courage to put yourself out there, and be ok with the criticism that comes along with it.
If the auto industry brought in a focus group like Domino's did, what would the feedback be from them? Would many of us even listen to them? Or would many in the auto industry use a confirmation bias to justify why the consumers are wrong, and why our process is right?
Papa John's frequently outsources its delivery services to DoorDash, it would be very easy to blame the difference in arrival time on delivery drivers. Without looking at the data below (which has been consistent), it would be easy to blame many external factors on longer delivery times. Factors such as labor shortages, increased traffic in town, etc. Some of those factors may be true, but they are true for all pizza providers in town. After looking at the data, the biggest differences are during the preparation & baking of the pizza. The cycle time of creating a pizza is significantly longer at Papa John's versus Domino's.
To be candid, I am ok with it taking longer. I'm ok with it taking over an hour. I just want to know what's going on, and do I have time to do something else in the meantime. I believe this is the same way most of our service clients feel when they are waiting for routine maintenance. They just want to be updated about the current status of their vehicle in service.
I have tested Domino's process at various times, days of week, etc. The results are like clockwork. The point I am trying to make is that even if all auto dealers have similar software, the level of execution is what will allow the best dealers to win this digital battleground. Technology is part of it, but people and process are a bigger part of it.
19 minutes door-to-door is completely mind-boggling to me. It's difficult to wrap my mind around that level of efficiency. I can only imagine the amount of thought, and willingness to fail that went into that end result. Any industry achieving that level of efficiency is inspiring to me, it shows that anything is possible with enough time and effort.
VR Pizza Construction: Domino’s created the first 3D pizza builder on its iPad app. To gamify the experience, friends could have VR pizza building competitions on social platforms...all of this in 2014!! It's all part of their strategy to stay ahead of the industry by leading the way in innovation.
Drone Pizza Deliveries: In 2016, Domino’s made the first-ever drone pizza delivery.
Self-Driving Vehicles: Domino's is automating the processes that are difficult to hire for, and automating the less-desirable tasks.
Domino's has already accepted pizza orders from the Metaverse, and delivered them in the physical world. They were first to the race. They are going where the puck is going to be, not to where the puck is right now. It's better to be prepared for change when it happens, instead of hitting the panic button when it does...