With pizza sales expected to rise over 10% in the next five years in North America, technology will be at the forefront of how and in what way pizza chains will continue to compete for a share of $45 billion in annual U.S. sales. Technology, such as mobile ordering, can save pizzerias time and money. Compared to phone and counter orders, which cost about a dollar's worth of time, digital ordering costs about 25 cents of an employee's time, according to Forbes.
Many of the top chains have taken ordering technology beyond mobile phones, from using a smart device to ordering via pizza emoji. Restaurant Dive tested many of these methods and assessed whether they seemed like marketing gimmicks or worth the time and money spent to develop.
What this means: Though Papa John's has historically been a first-mover in pizza delivery technology, competitors like Domino's have developed applications similar or superior to its offerings over the years, along with more cutting-edge products like drone delivery. The chain's Apple TV ordering app is its only differentiating feature, and — excluding customers who order Papa John's multiple times per month — is a cumbersome and gimmicky ordering method for its customers. It's clear that the company invested in this service and put thought into its aesthetic design, but the subpar functionality makes it seem like a poor investment — and an example of the “feature glut” Mike Nettles tried to avoid during his time as CIO.
It's unclear if Papa John's needs to hone its existing tech or invest in new digital initiatives, or if either strategy would be enough to improve its position — the chain has lost close to 5% of its market share to Domino's and Pizza Hut since the fall of 2017. Still, 60% of Papa John's sales are made through mobile orders, headway the brand could leverage.
What this means: Domino's has long been focused on technology, launching a website and focusing on e-commerce in the late 1990s, long before other restaurants and retail brands stepped up their e-commerce game. Its former CEO Patrick Doyle has called Domino's a tech company that delivers pizza. Its latest innovations, including a 2017 pilot program where it tested driverless delivery in Miami, show that it is keeping its eye on the impact that emerging technologies will have on the space. Whether or not all this technology is a gimmick or really keeps customers coming back remains to be seen, but Domino's is among the top pizza chains that keeps growing year over year. Domino's is closing in on 15% of the pizza delivery market with Pizza Hut trailing behind at about 13% and Papa John's losing market share.
What this means: The company initially was ahead of the technology pizza race, launching online ordering two years before Domino's built its website, but Domino's quickly picked up steam, and Pizza Hut has since been playing catch up. Over the last few years, the Yum Brands' pizza chain invested $90 million to improve restaurant technology, enhance digital and e-commerce capabilities and upgrade restaurant equipment at franchised restaurants. It also has been rolling out revamped restaurants in various markets to be more delivery focused. Yum Brands executives told investors during its Q3 earnings call that Pizza Hut has improved delivery times, quality of food, prices and made access much easier to customers.