By: Unknown
From: Revolution
By Harwood, Susie
The pizza chain has offered e-commerce services since 1999, but Susie Harwood finds out how it plans to continue its firsts with a mobile offer
Most companies claiming to provide the fastest e-commerce service would be treated with more than a little scepticism. But, in the case of pizza chain Domino's, it's believable. What other online shops can deliver their products within 30 minutes of an order being placed?
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 lnterflora 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 online 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. dommos.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 10O 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 Javabased. "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 ol 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 promo tional 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 keyto 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."
We always want to be seen as a leader. We're always looking at what's over the next horizon. Embracing new technology says a lot about Domino's as a brand
Chris Moore
Domino's
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
Richard Watney
Reporo
Dominos.co.uk: site revamp focused main site on orders
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, to order a Domino's pizza online
Dan Clays
Quantum
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 iTVad
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 percent a of all delivered sales in the UK (excluding carry-out)
2006 mobile commerce service launches on Reporo
Reporo.com: software allows mobile users to browse and buy
Copyright Haymarket Business Publications Ltd. Jun 2006
(c) 2006 Revolution. Provided by ProQuest Information and Learning. All rights Reserved.
