Domino’s has been betting on technology for quite some time now, with CEO Patrick Doyle famously saying it’s “as much a tech company” as it is a pizza company. The chain continues to pioneer the use of technology throughout the industry, with Domino’s automated delivery now being tested in some markets.
In a September 8 interview with CNBC’s Squawk Box, Doyle talked automation and its impact on the restaurant industry.
Here are the biggest takeaways from the August interview:
The company is currently in the midst of a partnership with Ford, testing delivery via automated vehicles. “What we’re testing right now is the last 50 feet of the delivery,” said Doyle “So we’re understanding how our consumers can interact with us — what do we need to do to make it safe for them, to make sure that they understand what they need to do? Will people come out of their homes or their apartments to get the pizza?”
Part of the test involves the use of a keypad, which would allow those who order pizzas to access the pie once the driverless vehicle shows up. “We’re getting in early and we’re understanding what needs to change,” said Doyle.
Changes in transportation are going to be “dramatic” over the next 5 – 10 years, admitted Doyle, who said his company wants to be at the forefront of that. Enter Domino’s automated delivery, which will be one of the first of its kind in the restaurant industry.
Citing the fact that Ford plans to produce self-driving vehicles by 2021, he said Domino’s wants to ensure it can be a part of the evolution of transportation: “We’ve got to understand it, understand how we can leverage it, and make it a great experience for our customers.”
While admitting that jobs within the company are “going to change,” Doyle was quick to say that the rollout of Domino’s automated delivery will still allow the company to grow its business.
“We employ a lot more people today in the US than we did before the majority of our orders were being done digitally,” said Doyle. “Jobs are going to change but you’re still going to need people to make pizzas, load the cars — and, frankly, we’re employing a lot of people in technology.” More than half of the company’s current Ann Arbor workforce, added Doyle, is employed in the technology sector.
For those who have been paying attention, Domino’s automated delivery isn’t that surprising. After all, the chain already offers delivery via Twitter, Facebook, Amazon Echo, smart watch, and a host of other devices. Technology was an integral piece of the company’s turnaround plan, and its implementation has helped to send sales and stock prices soaring.
Over the last 5+ years, in fact, the stock price of Domino’s has shown a high correlation (0.95, with 1 indicating a perfect association) to another fast-growing tech company: Netflix. And with fewer people shopping at malls (and staying in to watch Netflix), those numbers are likely to continue to grow. Turns out, adding tech to the menu increases market cap in a major way.
Aaron Allen & Associates is a leading global restaurant industry consultancy specializing in growth strategy, marketing, branding, and commercial due diligence for emerging restaurant chains and prestigious private equity firms. We have helped helped restaurant companies around the world drive revenues, increase profits, and enhance the guest experience through improved marketing, messaging, and menu engineering. Collectively, our clients post more than $100 billion, span all 6 inhabited continents and 100+ countries, with locations totaling tens of thousands.