Digital channels represented about 75 percent of sales in Q2, rising as high as 80 percent in some weeks. Allison said the delivery business—driven by higher order counts and ticket sizes—was effective in drawing new customers.
In fact, Q2 was Domino’s best quarter in terms of adding new active loyalty members since Q1 2019 when the chain ran its Points for Pies promotion.
“We are getting an incredible opportunity today to bring more customers into the brand,” Allison said. “If you look at the delivery business in particular, we’ve seen a significant increase in new customer acquisition over the course of the second quarter. Our task there is to take those new customer opportunities and convert them into the second purchase and the third and ultimately loyal customers going forward.”
Lawrence said the accelerated levels of demand seen during the middle of Q2 remained elevated through the end of the quarter with no discernible drop-off.
The trends confirmed Allison’s belief that Domino’s doesn’t need a relationship with a third-party aggregator.
“I cannot imagine that we would’ve been able to move as quickly as we have in meeting our customers … where they wanted to be if we didn’t have full control over that digital experience and the actual contactless experience at the point of delivering the food,” Allison said. “We’ve had pretty strong growth and demand without having to ask our franchisees to pay high fees to a third party.”
Domino’s continues to take on that third-party challenge through its fortressing strategy in which the brand fills markets to shrink delivery radiuses, thereby improving consistency, delivery times, and lowering costs. The brand also sees the strategy as a way to attract incremental carryout customers.
With increased sales, momentum around delivery, and the prospect of favorable real estate, Allison said he’s even more enthusiastic about the plan.
“An unfortunate reality of the pandemic is that there will be a number of retail stores and restaurants that will close, quite a few of which will be in a similar footprint to what we look for,” Allison said. “And I think also we may see a more favorable market in terms of rents that we can go out there and get with landlords. I’m as optimistic and more so than ever around fortressing.”
Also of note, Domino’s gave nearly $8 million in bonuses to hourly employees at corporate stores and supply chain centers. During the quarter, the company announced a $3 million investment in Black communities, including $1 million toward establishing the Domino’s Black Franchise Opportunity fund.
Additionally, the brand is in the process of expanding its supply chain infrastructure. Domino’s completed a supply chain center in Columbia, South Carolina, and is on pace to finish another in Katy, Texas. It’s working on a new thin crust manufacturing center in New Jersey, as well.