Sainsbury's vs Domino's Pizza: Unexpected competition

When you think about competition, think not just about current rivals but also about potential rivals. Sainsbury's, for example, is testing a new pizza takeaway service that aims to add convenience during the busy holiday season. And this is the kind of unexpected competition that Domino's Pizza has to consider when writing a marketing plan and conducting SWOT analysis.

'By giving our customers the chance to pre-order personalised hot pizzas and pay at the counter, we are saving them time and giving them a great value takeaway experience', says a Sainsbury's exec.

To streamline the in-store preparation process, the grocery chain is initially offering only two sizes of pizza, with multiple toppings available, in three branches. Customers order in advance and then pick up in the store, paying at the pizza counter rather than joining the queue to pay. All in line with Sainsbury's strapline, live well for less.

Grocery retailers like Sainsbury's typically offer frozen pizza or ready-to-bake pizza, but it's not usual to sell made-to-order takeaway pizzas. Yet adding takeaway pizza makes sense because so many shoppers like to buy premade meals to eat at home. Will consumers get into the habit of buying pizza where they buy milk, juice and nappies?

Sainsbury's is popular on social media, with 1.6mm Facebook likes, 505k Twitter followers, 96k YouTube followers, 171k Instagram followers, and 39k Pinterest followers. Comments about the pizza trial on these social media sites will help Sainsbury's gauge interest, in addition to tallying sales.

Domino's digital initiatives pay off

https://twitter.com/Dominos_UK

Price-conscious pizza lovers are clicking to buy from Domino's . . . and it's paying off for the pizza delivery giant. Online orders now account for three-quarters of all Domino's sales.

After launching a new ad campaign focused on price promotions, the chain received an avalanche of orders--200,000 orders on the final Saturday of September alone.

Domino's is always looking at different ways to make ordering fast and easy. Tweeting a pizza emoji is one way to buy. Ordering by talking to Amazon's Alexa via the Echo speaker is another. In fact, Alexa-orders are coming in already, as Domino's prepares for a future in which voice commands play a larger role in consumer buying behaviour.

Domino's UK: new research, new packaging and more

Domino's UK has introduced a new box--two boxes--a clever way to reinforce the brand logo (shown at left). One pizza box is red, one is blue, and both are recyclable.

The packaging redesign is based on research showing that 96 percent of all Domino's UK pizza orders involve two pies. So the new packaging doesn't just echo the branding, it subtly communicates the two-for promotion.

Domino's UK's latest results show that nearly 8 in 10 pizzas are ordered via e-commerce--and half of those orders flow through the company's popular app. The brand is highly social, with 1 million Facebook likes, 262k Twitter followers and hundreds of thousands of views for each YouTube post. Clearly, Domino's knows its target market, and keeps its brand in front of the audience in different digital ways. The company also gets customers involved in its social responsibility and environmental activities (such as Pennies become pounds).

Outside the UK, Domino's has made headlines lately for its test of a delivery robot, not an April Fool's joke.

Domino's digital marketing strategy

Few UK marketers are as successful in digital-media marketing as Domino's UK. The pizza delivery company has nearly 1 million Facebook fans and 212,000 Twitter followers. Consumers engage with the Domino's brand because they like its image, its service and the promotions mentioned in social media.

In fact, Domino's has an annual marketing calendar with specific social media content planned for each month and for each week. Yet about 10% of its digital media content is actually spontaneous, developed either in response to trending topics at the time or building on special events and other elements that can't be planned far in advance.

Domino's receives 70% of its orders online--and half of these are via mobile, including its app. The company has also arranged for ordering capabilities directly from Xbox game consoles. Domino's head of e-commerce explains:

Our target audience is a really good fit for the Xbox One – typically, gamers and pizza eaters are the same people.

The company's turnover is increasing and its digital marketing strategy is helping keep the brand in the public eye day after day.

Multichannel is the future of retailing

A steady rise in multichannel shopping shows that consumers are increasingly buying via mobile, supported by mobile payment options that are faster and more convenient than ever. For example, 20% of Domino's UK orders are made on mobile devices, usually iPhones and iPads. The head of Domino's commercial systems observes: 'One thing is for sure – there is a clear shift in consumer behaviour where mobile is the channel of choice'. Yet according to one study, only half of the leading UK retailers have optimised their e-commerce websites for mobile access, compared with 100% of the leading US retailers.

Claire's, a fashion accessory retailer, is building its first UK e-commerce site with mobile marketing in mind. 'By the end of 2014 we foresee that mobile transaction usage will overtake desktop computers', explains its director of European e-comm. 'Right now, 66% of 14-23 year-olds own a smartphone and 73% of teens are active on social media. We wanted our site to be an extension to our consumers’ lifestyles, an engaging destination to explore the latest trends and share their voice with us'.

Marks & Spencer is experiencing higher multichannel purchasing, and is emerging as a leader in in-store contactless payment acceptance, processing more than 230,000 Visa contactless payments every week. According to one M&S manager, 'Contactless helps reduce queue times even further, giving customers a payment option that's even quicker than cash'. Still, Marks & Spencer recently reported lower profits and is seeking to generate higher turnover in key categories such as apparel, which carry higher profit margins than food products.

Industrywide, high-street stores continue to go bust, leaving a high number of retail vacancies in many cities and towns. Will multichannel marketing lead to more vacancies in the coming years if shoppers shift most of their purchasing to mobile or online sites?

Domino's likes bad weather

Domino's iPhone app

Bad weather? Market leader Domino's doesn't mind. The pizza delivery company's smart mobile and social media marketing moves are increasing turnover and reinforcing brand loyalty among key customer segments.

During a rainy and snowy 2012, Domino's UK turnover rose compared with 2011, as customers called or clicked for delivery rather than venturing out in person. 

Online orders now account for 56% of all Domino's UK pizza deliveries; of that percentage, 20% are mobile orders. The company is taking advantage of its mobile popularity by using QR codes in targeted promotions.

With nearly 770,000 Facebook likes, 1.4 million YouTube views and 88,000 Twitter followers, the company markets its range of products to an ever-growing social media audience.

On St Valentine's Day, for example, Domino's offered a special price for pizza, garlic bread, potato wedges and a movie streamed to a desktop computer, tablet or mobile. During December, it hosted a global pizza party with special discounts available through the Facebook page.

The company has also introduced a crowdsourced pizza topping, involving its customers in a new and active way.

What's next for Domino's?

Rain, mobiles and the cloud help Domino's UK grow

Televised sports, bad weather and pizza takeaway have been a wonderful sales combination for Domino's UK.

'Instead of going out to a restaurant, people tend to order in. When the weather turns nasty we always see sales turn upwards', says the CEO.

Between the Euro football championships and two weeks of Olympic sports, Domino's has boosted its revenue and profits this year...and now the pizza delivery firm has an appetite for growth on the continent.

Today, Domino's announced its acquisition of the Swiss franchise as European consumers caught in a difficult economic situation continue to substitute takeaway for dining out.

Domino's UK is ready for expansion, putting its online ordering system into the cloud where network capacity can be adjusted to meet demand. It also offers pizza ordering apps for different mobile operating systems. Anything that makes pizza ordering more convenient is likely to help Domino's build relationships and sales, especially in bad weather.

Domino's online success

New Media Age reports that Domino's UK is successfully leveraging online and social media to build loyalty and boost online sales to pizza lovers. From January-June 2010, Domino's online pizza sales exceeded 32% of its total sales, a very good performance.

How does Domino's do it?

1. Make customers feel at home. "Hello pizza lover" is Domino's greeting to visitors who click on its home page. That's a positive start to the marketing conversation.
2. Make ordering easy. The Web site is geared towards online ordering, and specials appear on the home page. No need to dig deeper to learn that Tuesdays are 2-for-1 day, for example.
3. Keep things simple. Click "contact us" and you see three choices: one link to report order problems, one link to reach the corporate office, and one link to stop receiving email and text messages. Simple and easy.
   
4. Involve customers. The Facebook page invites comments, stays updated and mirrors the offers on the main Domino's home page. More than 36,000 people have "liked" this Facebook presence.
5. Reward customers. Every week, Domino's gives away a free pizza to the "king" and "queen" of pizza, the two fans who have brought the most new fans to the Domino's FB page.

But please, Domino's, add a link from your Web site to your Facebook page, so prospective fans can find you there. And what about Twitter?

Domino's, Snow and Susan Boyle

Turnover and profits at Domino's Pizza are up, thanks to bad weather and Susan Boyle.

Severe winter weather and heavy snow in Europe has encouraged more consumers to order Domino's takeaway pizza.

Challenging economic conditions may have played a role, as well. Consumers are buying cautiously and instead of spending for a big restaurant meal, many choose takeaway for a modest splurge.

Domino's also says its sponsorship of Britain's Got Talent--especially the final, featuring Susan Boyle--was a major factor in increasing turnover. The Domino's brand enjoyed a halo effect by association with BGT . . . and there was a definite sales bump, according to the chief executive:

It's difficult to pull out a figure and attribute that entirely to BGT, but we did have a record week when we had the final, so it does have an effect on sales.

In the US, Domino's is running a "turnaround" campaign to show that it's improving its pizza, adding more herbs, better cheese and a special glaze on the crust. Few firms are willing to publicly admit their products need improvement, so Domino's US approach is a refreshing change and an intriguing campaign.