Domino's: Domino's delivers through digital

The brand has been offering e-commerce services, online and via iTV,
since 1999. Combined, the two channels accounted for nearly £14
million in sales last year; that's about two million pizzas. E-commerce
now makes up 13 per cent of Domino's UK sales, up from two per cent in
the first year. But, UK chief operating officer Chris Moore, who has
been with the company for 16 years and set up its marketing operation,
is keen to expand this to a third of sales.

His plans include rolling out the delivery service to new platforms,
including mobile and IPTV, and increasing investment in advertising, on
and offline.

"The biggest demonstration that we're putting a lot more focus and
resources into it is the fact that we just finished a TV commercial that
is purely about e-commerce," says Moore. "Obviously, every TV commercial
we run has the web address on it, but the new ad we've just finished
filming, which will go live in the next couple of months, talks about
the difference between the speed of ordering on the phone and the speed
of ordering online. We want to make sure we're as known for delivering
pizza on the internet as Amazon is for books and Interflora is for
flowers."

Domino's is lucky in that online pizza-delivery is a relatively
exclusive market for the firm, at least on a national scale. Its nearest
rival in terms of store numbers is Pizza Hut, which doesn't offer a web
service in the UK.

In the meantime, Domino's intends to capitalise on its position: "Our
growing coverage of stores has meant that we can offer, and advertise,
the online-ordering service on a national scale. This gives us an
advantage as most of our online competitors are regional chains and
limited to the amount of presence they can economically command online,"
he says.

Moore thinks the growth in e-commerce sales is partly due to wider
trends, including the growth of high-speed broadband, which means that
customers can order pizzas faster on-line than over the phone. But, he
believes another reason for Domino's success is the fact that the web
site is easy to use and completely focused.

The brand hired AKQA to redesign the site in 2004, which saw it move all
corporate information to a separate site (www.dominos.uk.com), so
Dominos.co.uk is focused on orders. The home page simply asks 'Hungry?'
and requests visitors to input their postcode to find their nearest
store and place an order. "We've understood that customers want pizza
delivered fast. No corporate stuff, no games; just very quick ordering.
Ordering a Domino's pizza really is the fastest thing in e-commerce;
that's what our customers are looking for," says Moore. "Ordering online
also means as close to 100 per cent accuracy as you can get. The
platform allows for those crucial details that often get missed in any
delivery service, for example, 'beware of the dog', or 'ring top buzzer
only'," he adds.

The growth in e-commerce sales is having an impact on store economy
since it means more orders without the need to employ more staff to
answer calls. Online orders are also 25 per cent higher on average than
those over the phone, says Moore. "This comes from the fact that
customers are in control and can browse through their menu at their own
pace," he adds.

Mobile service

Now he's happy that the online service is up to speed, Moore is looking
to other platforms to boost sales while continuing to roll out new
stores. First on the list is mobile, and he is working with mobile
commerce firm Reporo to launch a service that lets people order pizzas
via mobile by inputting their postcode.

Reporo is a Java application, downloadable to mobiles, that lets users
browse and buy products from big brands such as Boots, Currys and CD
Wow!, book hotels via Active Hotels, and now order pizzas from Domino's.
The latter went live early last month and is in its initial testing
phase.

"We were looking at launching an SMS facility so people could order a
pizza by text, but it's not as easy as we thought as there are problems
with the reliability of SMS and setting up the registration process," he
says. "The Reporo option is very neat because the customer has already
signed up and put in their details, so payment is taken care of. It's
also part of a platform, which means our customers can browse other
content and shops at the same time as ordering a pizza."

Reporo MD Richard Watney says the service is well-suited to a
quick-response service like pizza delivery because it is Java-based.
"This means transactions take place in real time and orders are sent
straight to the appropriate store, as opposed to WAP and SMS, which have
to go through a mobile operator."

Moore believes it's the right time to go live with a mobile offer, with
3G services starting to take off and more than one billion WAP pages
being downloaded every month.

Watney admits that the growth of sales via Reporo has been slow, though
steady, since launch at the start of 2005 - about 17,500 transactions -
but he believes the addition of low-risk purchases, including pizza, may
encourage more users. "If you're in the pub and you're peckish, you can
just go on to the service, order a pizza and have it delivered when you
arrive home. As we store payment details, it's an end-to-end transaction
and people don't have to worry about scrabbling around for spare change
to pay," adds Watney.

Moore won't be drawn into making any predictions on how quickly he
thinks the service will grow, but he believes there is strong potential,
pointing to the fact that 12 per cent of Domino's phone orders are made
on a mobile. He admits that this doesn't necessarily mean that all these
orders are being made by people out and about, but adds: "There's
certainly more evidence that people are not necessarily just ordering
from their home or regular delivery address. We're not offering any
forecasts as to what we think will happen. Let's get it out there and
see what happens. But, do we realise that mobile is an important space
to be in? Yes, absolutely."

The next step is to market the new service, which will probably include
a number of initiatives, although Moore says much of this has yet to be
decided. "We'll certainly market it in the same way as we've been
marketing the site - anywhere you see the Domino's pizza logo, it should
have a Dominos.co.uk logo underneath it. It will be on leaflets, direct
marketing, the side of trucks, on pizza boxes and in-store," he
adds.

Despite investing heavily in digital as a sales channel, Moore admits
the firm hasn't spent a huge proportion of its marketing budget on the
web historically - about two per cent last year. But he points out that
only search and online display ads come out of the national ad budget.
Affiliate marketing is also a huge channel for the company, with around
5,000 affiliates driving traffic to the site. Moore says affiliates
account for a huge amount of business, but this isn't counted as
marketing spend as their commission is covered by the individual
stores.

Domino's works with BLM Quantum, the digital division of its media
agency, BLM, on web marketing. As with every other area of its business,
Moore says Domino's is keen to do new things on the marketing front. "We
have always been innovative in terms of product development and the
pizzas we make, but we want to be innovative in other areas of the
business, particularly marketing," he says. "We always want to be seen
as a leader."

Improve targeting

In addition to increasing digital marketing spend, Domino's is working
closely with Quantum to find out more about its online customers to
improve targeting. Quantum is helping the brand to create a detailed
profile of its online customers using research, to develop new,
innovative marketing campaigns.

For example, Moore says Domino's already knows that many customers use
eBay and visit Dominos.co.uk site directly from it. "This knowledge
allows us to come up with promotional offers on eBay. Very shortly we
are going to launch the first one-hour lunchtime auctions that will
enable customers to bid for promotional offers such as free pizza for a
year," says Moore. "We know that some of our customers use eBay at
lunchtime, and come to us to order pizzas, so you've got marketing to
support that and we are targeting our customers where they spend time
with relevant offers."

Such research should enable the brand to come up with other targeted
promotions. Quantum, meanwhile, is planning a web campaign around
football. "Online ads during the World Cup will stream messages in real
time to tell people how long they have, to the latest minute, before the
game starts, to order a Domino's pizza online," says Dan Clays, managing
director of Quantum. He adds: "We are seeing significantly higher
conversion rates from broadband users and associating Domino's with
speed is key to the next phase of our online marketing."

Despite being first on iTV, first online and now first on mobile, Moore
is already looking to the next platform and the next big battleground.
"We're never happy with our lot. We're always looking at what's over the
next horizon," he says.

"I think the next big thing is going to be convergence, so things like
Sky-by-broadband. That's a space where we definitely want to be. In
fact, we are already talking to Sky about that and we have big plans
with them. Obviously, the main reason for doing it is to get more sales,
but I think embracing new technology also says a lot about Domino's as a
brand."

DOMINO'S E-COMMERCE MILESTONES

1997: first interactive pizza delivery completed in Cardiff through

YesTV

July 1999: signs deal with Open

Sept 1999: launches Open interactive service

Nov 1999: rolls out online pizza-ordering service

July 2000: Telewest and Cable & Wireless (ntl) launch interactive TV

(iTV)

Sept 2000: Domino's airs the first fully transactional iTV ad

2000: iTV makes up 80 per cent of e-commerce, the remainder being

internet

2004: internet makes up 80 per cent of e-commerce. The rest is iTV

2005: e-commerce net sales reach £13.9 million, 70 per cent up on

2004, and makes up 10.4 per cent of all delivered sales in the UK

(excluding carry-out)

2006: mobile commerce service launches on Reporo.