At diginomica we’ve held up the QSR (Quick Service Restaurant) industry as a prime example of digital disruption and transformation in action, whether through the rise of app-enabled delivery aggregators such as Deliveroo or Uber Eats or the roll-out of in-store tech such as McDonald’s self-service kiosks.
It’s easy to see the appeal of digital tech for fast food firms which need to operate at the most optimized margins, high ease of use and the maximum speed from order to delivery to customer, be that in-store or remotely.
Much of the industry is in catch-up mode with the leaders. The way other QSR brands have started rolling out their own self-service in-store capabilities is a case in point. Most firms have also signed up with one or more third party delivery services. The notable exception there is Domino’s Pizza, the firm typically credited with pioneering home delivery, whose CEO Rich Allison isn’t handing over his firm’s reputation to outsiders:
When I take a look at our US, I don’t see any need for us to go on to these third-party platforms. We have an incredibly strong digital channel in our business. We’re far and away the digital leader in pizza. So it’s just not clear to me why I would want to give up our franchisees margin or give up the data in our business to some third-party, who will ultimately use it against us.
So delivery for Domino’s remains a ‘core activity’ to be executed by the firm itself. As Allison alludes to, the firm has been a front-runner in digital transformation and that continues to be the case, most recently with the inevitable next step in the digitally-enabled deliver paradigm - the self-driving pizza.
To that end, the firm has tied up with robotics firm Nuro to pilot autonomous vehicle pizza delivery. The carrier will be a customised vehicle known as the R2. Customers can track the vehicle via the Domino's app and get a unique PIN code that unlocks a compartment to get their pizza.
Time is now
It’s a small pilot exercise at first, limited to a single store in the Houston area where Nuro has been running delivery services for grocery giant Kroger since earlier this year as “an entirely new platform for local e-commerce in solving the last mile”.
This isn’t the first time that Domino’s has attempted such a trial. Back in 2017, it worked with Ford Motor on a program, now ended, that saw autonomous Ford Fusion hybrids delivering pizzas to homes in Ann Arbor, Michigan. The vehicles would pull up outside of houses and wait while customers came out to the kerb to pick up their pizzas from a locked warming chamber built into the car. At that time, while the vehicles were kitted out with self-driving tech, there was also manual intervention by a Ford safety engineer.
Flash forward a couple of years and according to Kevin Vasconi, Domino’s CIO, the time is ripe for fully-automated delivery:
Consumers are ready for this. I have been surprised by the overall positive reaction people have had to an autonomous vehicle delivery experience.
CEO Allison is equally enthused, declaring:
We continue to expand the self driving delivery learnings that bring us closer every day to the technology that could truly revolutionize the way we do business…We have got to drive every day to provide consistent and great service, delivery service to our customers. We are working on that every day and we will continue to invest in technology.
Next up on that agenda is GPS tracking tech that will enable Domino’s customers to see precisely where their pizza is on its delivery route:
This will be an innovation step that will bring even further transparency to the experience of tracking an order and I am pleased that we will be getting it off the ground very shortly…[GPS] will once again put some fantastic technology not only in the hands of our customers to get better transparency into their pizza order, but also in a lot of ways, I am even more excited about the additional information that it will give our restaurant operators as they manage the efficiency around their delivery operations.
Allison is candid about the role that tech investment plays in his firm’s business model. Yes, it makes the customer experience better (in theory), but it’s also vital to keeping competitive in a fast-changing market sector with aggressive new rivals:
There still remains a heavy degree of discounting in the marketplace by the third-party aggregators and also heavy degree of advertising spend as well. That group of aggregators has taken a fairly significant share of voice out there in terms of the advertising landscape around food delivery. So we expect that behavior to continue for some period of time.
We continue to develop fantastic technologies to put into the hands of our customers and into our stores to better drive operations and we are pushing, I think very importantly, very hard on service within our system, because a critical element, as we look forward into this new world where you can get anything delivered, well, we not only have to be the most economical and lowest cost delivery provider, but we have also got to be the best, getting to the door on time every time.
That’s where the latest autonomous vehicle trials could pay off, although it’s going to be some time before it’s clear whether Domino’s suspicions that this is the right time for such an innovation are correct.
The addition of GPS functionality is a ‘nice to have’ although Mashable’s Alex Perry has some concerns:
I don't need to know exactly which cross street my pizza is at. I'm willing to trust that it will get to me eventually. More importantly, delivery people don't need more reasons for customers to be jerks to them. Someone out there is going to obsessively track their pizza and make a scene because the driver took a route the customer didn't like…we’ve made it this far without this tech in the Domino's app; we should discourage surveillance of food service employees whenever we can.
I’m not entirely in agreement here. I think in this environment of mobile ordering and one hour deliveries, the ability for your customers to be able to see where an order is is becoming ‘a need to have’. I know that I steer clear of firm’s whose delivery providers of choice are are only able to state that I’ll get my goods between 9am and 7pm and that I should stay in during that time. That’s clearly all the more relevant in the QSR sector. It’s not called fast food for nothing.
Domino's remains a leader in digital innovation and sets a benchmark for its QSR rivals.