Pie in the sky? Domino’s considers drone delivery to buck ‘restaurant recession’

    Patrick Doyle can remember when customers struggled to order pizza through sketchy dial-up internet connections. Now the Domino’s Pizza Inc. CEO and nearly 20-year company veteran has to pause to think before naming all 17 different ways of ordering a Domino’s pizza today, which include texting a pizza emoji or via Amazon’s AI persona, Alexa.

    As Bloomberg’s Shelly Banjo notes in a new column, digital orders now make up more than half of Domino’s sales and are feeding its growth: Sales at established U.S. locations rose 13% in the latest quarter from the year before, far outpacing rival Pizza Hut.

    Digital orders come with higher transaction amounts, and give Domino’s data to track customers, helping it better target them with offers. The company’s tech focus partly justifies its Silicon Valley-like valuation.
    “Domino’s is staying hot while much of the rest of the restaurant industry has gone cold, in what some are calling a restaurant recession,” Banjo writes. “Sales at chains tracked by research firm MillerPulse increased by a mere 0.3 percent in November from the year before, following six months of year-over-year sales declines.”

    Domino’s recent success stems from an early and ongoing embrace of digital-ordering technology, and Doyle is not done thinking about new technological advances to further growth. The new focus is transportation, one of the company’s largest costs and challenges.

    “Domino’s recently invested in a fleet of fuel-efficient cars with built-in ovens that keep pizzas warm. Facing a dearth of delivery drivers and high labor costs, Doyle is also studying driverless cars and testing pizza-delivering drones in New Zealand,” Banjo writes. “It’s a long way from dial-up. But then so is the restaurant business.”

    Banjo says technology will increasingly determine the winners and losers among restaurants, adding recent innovations by companies “on the right side of the digital divide” such as Panera Bread and Starbucks Corp.

    “Meanwhile, restaurants that have dragged their feet on digital are paying the price. Chipotle Mexican Grill Inc. only this month made it possible to place catering orders online, finally upgrading from fax,” she writes. “Other companies such as Jack in the Box Inc. are just now rolling out mobile apps, while Popeyes Louisiana Kitchen Inc. is only now starting work on digital ordering, which could take a year to 18 months at the earliest to complete.”

    Read the full column.

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