Domino's Pizza: IT a key competitive advantage

At home, a 'share game'

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Technology has been key to driving sales and improving unit-level economics in Domino’s domestic system of nearly 4,900 stores, Doyle said. An improvement in store profitability would ultimately dictate renewed net unit count growth in the United States, which has been flat for years, he said, but U.S. expansion would only be “modest” once again in 2013, with the bulk of the company’s total openings happening outside the United States.

The company's focus in the United States would be on taking market share while growing same-store sales, Doyle said, adding that its major competitive advantage in that quest would be its digital-ordering platforms.

He shared data from The NPD Group that found Domino’s, Pizza Hut and Papa John’s take in 85 percent of all online sales of pizza in the United States. “The three of us absolutely dominate here,” he said. “This is a very tough place for the regional chains and mom-and-pops to play.”

The company's emphasis on technology also allows for digital promotions like this year’s Domino’s Dollars offer, which worked like a “classic packaged-good bounce-back coupon,” Doyle said.

“We tried to drive more people to online ordering, because any time we can convert primarily phone-based customers to digital, it’s a win for us,” he said. “It also added more value to that first order … and since the $5 coupon off the second order was good only for 10 days, that added frequency.”

In all, digital orders increased 27 percent last year compared with the number of digital orders placed in 2011, chief information officer Kevin Vasconi said. The largest source of digital orders was the Domino’s website accessed by a desktop or laptop computer, followed by mobile Web browsers on a smart phone or tablet, then Domino’s iPhone app and its Android app.

“Every time we introduce a new channel, we don’t see cannibalization,” Vasconi said. “Or if we do, it’s just for a little while. New channels mean new, incremental customers and more growth.”

He added in a highly technical portion of his presentation that Domino’s would ensure its adaptability to new digital devices through its adoption of “responsive Web design,” which allows the company to code its websites and apps to fit any screen size for new computers, phones or tablets. That investment would keep Domino’s from having to make and maintain a new app for every new gadget that gets introduced, he said.

“This lets us get out to new platforms very quickly, and then if we see a device take off like the iPhone, we can build an app for that experience,” Vasconi said.