Domino’s Pizza – A Digital Transformation Success Story

Domino’s Pizza – A Digital Transformation Success Story

Domino’s Pizza has answered the question whether digital transformation is a good investment or not. 

In the mid 2000’s, Domino’s quality and brand had nosedived. Domino’s stock price hit an all-time low of around $3.00 a share in 2008. Customers claimed Domino’s pizza crust tastes like cardboard and its sauce tastes like ketchup. 

A significant turn-around effort was launched that included product rehabilitation as well as investment in digital capabilities to deliver the product in innovative ways. Domino’s embarked on a digital transformation to differentiate itself from its industry peers and gain back the market share it had lost. Domino’s has transformed itself from a pizza delivery company to a technology company. 

Revenues in 2008 were around $1.4 billion. In 2020, annual revenue was around $4.1 billion. As of March 2021, Domino’s share price is around $351. From 2010 to March 2017, Domino’s share price outperformed the tech giants: Amazon, Apple, Facebook, and Google. It has also significantly outperformed its competitors: Pizza Hut, McDonald’s, and Papa Johns. 

Domino’s owned its product failures and made monumental changes. It got rid of its original recipe and launched a new menu that included new categories like Specialty Pizza. 

Domino’s invested heavily in technology. The company’s executives supported the new digital transformation efforts and developed a newly empowered IT department in partnership with the marketing department so collaborative efforts could yield quick, iterative processes. As of 2016 about half of Domino’s 800 headquarter employees worked in software and analytics. 

In 2008 the company launched its Pizza Tracker technology so customers can track their orders. In 2011 Domino’s went mobile and launched its iPhone app so customers could order on the go. In 2015 it launched Domino’s Anyware so customers could order at any time through any device. As of 2017 nearly 60% of orders originated online.  In 2016 Domino’s launched the first ever drone deliver of pizza in New Zealand. The company launched its car-side delivery service in 2020 during the COVID-19 pandemic. In April 2020, the company launched the Zero Click app. You can now order Domino’s pizza by doing absolutely nothing. The app automatically places an order 10 seconds after the user launches it.

Domino’s builds its new technology and leases it out to its franchisees. Stores are charged a fee for every sale through its platform. Key components of the platform are its point of sales system, a digital royalty program and a mobile application. Domino’s has even introduced a high-tech delivery vehicle with storage space for 80 pizzas and an oven for warming pizzas. 

Domino’s has reengineered its product and its brand in a relatively short amount of time. It has grown its revenues and its share price to new highs and continues to reach a new audience. Give the breadth and success of Domino’s innovations there can be no doubt about the benefits of digital transformation.