Tag: Domino’s

OM in the News: The Pizza That Defied a Pandemic

“Few industries have suffered more during the pandemic than restaurants,” writes The Wall Street Journal (Sept. 5-6, 2020). More than 15,000 restaurants have failed during the coronavirus pandemic. Sales at stores open at least a year plummeted 37% in the second quarter from a year earlier.

Domino’s, however, didn’t have those problems. Its U.S. sales in the same period leapt 16%.

In part it was lucky: it has little dine-in business. But it has also perfected order-in and delivery through intensive innovation. While many restaurants depend on multiple systems from outside suppliers for technology such as online ordering, Domino’s developed its own, single proprietary point of sale system for all of its more than 6,000 U.S. stores.

While the pizza is made by hand, everything before and after that stage has undergone relentless innovation. Since 2007, the range of channels through which to order digitally has steadily expanded: via desktop, then mobile, apps for the iPhone, iPod Touch and Android, Samsung TVs, Pebble, smartwatches, Twitter, Amazon Echo, Google Home, Slack, and Facebook Messenger. Order time has reached its minimum with “zero click ordering”: Open the app, do nothing and in 10 seconds your favorite pizza is ordered.

All were developed to make ordering and delivery faster and more convenient. And because digital ordering obviates the need for cash to change hands, it also aided in physical distancing when the pandemic began.

Digital ordering is key to growth for food-service establishments because it yields valuable data for better targeting customers and expedites pickup. Five-ten percent of the typical quick service chain’s orders are digital. Domino’s share was 65% last year and has since climbed to 75%. Domino’s also benefited from new concepts it was able to introduce as the pandemic rolled across the U.S. One was “Carside” pickup, with GPS order tracking so that customers who didn’t want to interact with a driver could confirm the driver was in front of the house.

Classroom discussion questions:

  1. How can other restaurant chains design more efficient services? (Hint: see Chapter 5, p. 180 of your OM text)
  2. What is Domino’s competitive advantage?

OM in the News: Domino’s and the Driverless Car

“In the race to develop self-driving cars, much of the attention has focused on ferrying people,” writes The New York Times (Aug. 30, 2017). But delivering goods – from groceries to packages to books and more – may offer a considerable opportunity as well. The Domino’s pizza chain this week plans to start testing deliveries using a self-driving Ford Fusion sedan outfitted with enough sensors, electronics and software to find its way to customers in Ann Arbor, home of the U. of Michigan. The possibilities of pizza delivery are not hard to imagine. Americans already take delivery of billions of dollars’ worth of products sold by Amazon and other online retailers. In the future, a retailer like Home Depot could deliver building materials directly to job sites.

The Domino’s experiment offers Ford a chance to showcase its technology. As far as using such cars as a mode of delivery, Ford expects to begin producing a fully autonomous vehicle that will have no steering wheel and no pedals in 2021. Driverless vehicles are not a rare sight in Ann Arbor. The university is operating a vast pilot project to develop connected-car technologies, and self-driving Fords or Lexuses can often be seen navigating downtown streets.

Because there is no delivery person to bring pizzas to the door, customers will have to walk outside to retrieve their order. They will be alerted by text when the car is nearing their home and when it arrives. A red arrow on the car’s rear window tells customers to “start here” and directs them to a touch screen. Keying in the last four digits of the customer’s phone number causes the window to open, revealing an insulated compartment large enough to hold 5 pizzas and 4 side orders. One customer advantage of taking delivery from a self-driving car: If there’s no driver, there’s no tip.

Classroom discussion questions:

  1. What are the implications from an OM perspective of the proposed system?
  2. Do your students view this concept favorably?