Domino’s carryout order count was 3.9 percent positive in 2019 on a same-store basis. It was 8.1 percent positive in total across the U.S. system. At the end of Q3, carryout represented 45 percent of total domestic orders.
So, what does this path forward look like exactly? It works across multiple fronts for Domino’s.
But perhaps the best place to begin is real estate. By clustering markets in a continual “fortressing” strategy, the chain guards against third-party intrusion by shrinking delivery radiuses and improving consistency, delivery times, and lowering costs. The most expensive thing Domino’s does, though, from a labor perspective, is take pizzas from point A to point B. Fortressing eases wage rates by improving, over time, the number of deliveries per driver, per hour, franchisees can leverage. Domino’s sees a reduction of about 2 minutes on average in delivery times in these fortressed territories. (Here's more on the strategy and some examples of why it's working for Domino's).
However, the expansion model also generates incremental carryout traffic, Allison said.
He suggested people sometimes conflate carryout and delivery, but Domino’s research shows a carryout customer is “absolutely different” than a delivery one. “The carryout in the new store, the fortress store, almost 100 percent, more than 90 percent incremental,” Allison said.
“We are reaching customers that simply weren't enjoying the Domino's brand there. So that's a really important part of the financial equation to get those franchisees excited about the investment opportunity.”
With delivery as it relates to fortressing, Domino’s picks up new addresses thanks to more stores, yet they’re mostly shifting from an old restaurant to a new one; the brand is simply getting the food there with better service times. Carryout welcomes a totally new customer.
The value proposition is different, too. Domino’s touts a $7.99 large, three-topping carryout special, available very day of the week. The hero offer for delivery is $5.99 mix and match.
Earlier this week, Domino’s started running adds around new “Pie Pass” technology. It brings personalization to carryout by greeting guests by name on digital menuboards when they walk in.
Customers order and pay online, or through Domino’s app, and show up at a designated time, avoiding lines. SVP and chief innovation officer, Dennis Maloney, called it “the ultimate VIP carryout experience where customers don’t have to be a regular customer to be treated like one.”
Consumers can also check into the Domino’s Tacker or order confirmation page when they arrive to make sure their order is ready to go. The brand rolled out TV ads starring Norm from “Cheers.”
Domino’s has ramped up messaging around carryout in other ways throughout this past year. It expanded the $7.99 construct toward the end of 2019 to include all five of its crust types.
And this is only going to get deeper. “Because we see it as a huge opportunity for us,” Allison said.
Carryout is two-and-half times the number of transactions for Domino’s compared to its domestic delivery segment. More than 600 of the chain’s U.S. stores now feature pickup windows.
There is also room to grow with digital adoption, a place Domino’s has proven more adept than almost any restaurant chain in America. The brand currently sees a run rate of about 70 percent digital sales—75 percent in some urban markets. But its far more entrenched on the delivery side. Carryout guests still call the store, in other words. Hence, the Pie Pass introduction. “There are other things that our teams are working on and investing in here because we do see that as a great opportunity to help us to continue to drive that business, not only order counts, but also giving us an opportunity for smarter upsells and other things that help us drive smart ticket in the business,” Allison said.