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According to the latest news, Domino’s seems to be doing well under these extraordinary challenging coronavirus conditions. Reports indicate that Domino’s’ U.S. same-store sales rose 16% in the second quarter of 2020.
A large part of Domino’s success comes from the fact that it has “owned” pizza delivery for some time. Domino’s did not have to scramble to address delivery upswings due to coronavirus. The brand did make some changes to address customer fears. As part of its commitment to delivery, Domino’s instituted contactless delivery as well as additional safety procedures.
Contrast Domino’s success with Pizza Hut. Pizza Hut is struggling. The Pizza Hut brand’s poor performance is weighing heavily on YUM!, which includes KFC and Taco Bell, and Habit burger. Reporting indicates that Pizza Hut is losing out to Domino’s and to Papa John’s.
Pizza Hut’s largest franchisee, and the largest franchisee in the U.S., NPC International, has filed for bankruptcy. NPC owns 1600 Pizza Hut and Wendy’s stores: 1200 Pizza Hut and 400 Wendy’s locations. NPC’s bankruptcy statements state that its dismal fortunes are related to Pizza Hut’s declining sales. NPC told the bankruptcy court during its hearing that labor costs and the lack of availability of certain ingredients such as fresh beef were also responsible for Pizza Hut problems. According to Business Insider (July 1, 2020), the NPC filings state: “Deteriorating brand recognition has been further exacerbated by decreased menu innovation and the lack of a clear, long-term strategy by the Pizza Hut Franchisor to address the brand issues to provide a clear and differentiated identity.”
This statement from NPC is important. Certainly, Domino’s history of delivery made the brand ready to manage in our current pandemic crisis. And, its focus on making that delivery safe from a customer’s perspective has also strengthened Domino’s reputation as a superior deliverer of pizza.
But, there is something more. What does Pizza Hut stand for these days? What is its relevant brand differentiation? Without a clear brand differentiation, Pizza Hut is just another generic offer making it especially vulnerable at this volatile time. What is Pizza Hut’s distinctive brand claim and character?
Pizza Hut should take a page from its siblings, KFC and Taco Bell, both of which have created compelling brands. KFC uses The Colonel whose values and personality imbue the brand with authenticity. Taco Bell has cultivated an irreverent, somewhat rebellious, every day indulgent brand through extraordinary menu creativity.
Domino’s has been on a long and disciplined brand rebuilding that is now paying off. Domino’s faced the facts and took actions resulting in its current superior performance. Here are the six “Can-Do” actions the Domino’s implemented to rebuild its brand.
1: Fix the Food
Way back then – over a decade ago – Domino’s decided on a public mea culpa by honestly advertising that its product tasted terrible. The crust tasted like cardboard and the sauce tasted like ketchup. Social media had been excoriating Domino’s’ pizzas. Using actual focus group conversations with customers in the advertising, Domino’s admitted that its product lacked flavor. As comedian Stephen Colbert said, “It takes alpha meatballs to stand up and say ‘America, we suck.’”
The bold admission of flavorless product had an extraordinary effect. Domino’s had built its business on delivery speed and reliable service with “good enough” pizza that was at least hot when delivered. Quality was a secondary priority next to delivery. Domino’s was a quick way to receive a hot pizza at your doorstep.
Fixing the food, Domino’s reinvented its pizza by making the sauce more tasty – sweeter and spicier – and by making the dough much better. According to The Detroit News in 2009, Domino’s’ revamped pizza has “a new garlic-seasoned crust topped with a mix of mozzarella and provolone held together by a nuanced red-pepper infused sauce that tastes sweet at first but concludes with a kick.”
2: Disciplined New Product Development
Along with fixing the food, Domino’s committed to a new, varied menu. For a year, Domino’s continued to update its menu. By 2010, over 80% of the Domino’s menu was new or different relative to its 2008 menu. The brand added sandwiches and pasta to increase lunch sales. Also, a more varied menu can appeal to groups where some individuals might not want pizza.
3: Restore Relevance
Following the taste transformation, Domino’s focused on store reimaging. The advertising featured actual franchisees saying how they were so personally invested that they were knocking their stores down to build better, more modern stores. Seeing franchisees take sledgehammers to drywall out of love for the brand was compelling. New, bright, contemporary stores reinforced the perceptions that the brand was keeping up-to-date.
4: Reinvent Delivery - Again
Then, came Domino’s Carryout Insurance Program. This program states: “We guarantee your pizza looks and tastes great when you come to your favorite Domino’s location to pick it up. But, we understand accidents happen. Domino’s Carryout Insurance program protects your order if it gets ruined after you leave the store. Just bring the damaged, uneaten pizza back to the store you ordered from in its original packaging within two hours of the time you purchased it, and Domino’s will remake it for free.”
5: Focus on Direct Competition
Since December of 2009, Domino’s has focused on turning around the brand by developing relevant differentiation that connects with customers. In doing so, Domino’s carved out a special place for itself in the pizza restaurant category. Domino’s created a brand with a “can-do” attitude that today generates honesty, responsibility, transparency, and credibility. Domino’s can-do attitude helps customers believe that the brand will do what it says it will do, whether it means fixing the food or providing safe food.
6: Focus is Fundamental
All of these communications deliberately focused on giving Domino’s a relevant differentiated brand promise. Domino’s decade of customer-focused brand change turned around the brand, making it more than a delivery hero brand but making it a brand that customers feel confident turning to for a safe, delicious, at-home meal.
Domino’s is weathering Covid-19 due to its disciplined approach to relevantly differentiating its brand promise while other brands focus on generic features such as ingredients, delivery, variety, and price. Domino’s is a great example of how to reinvent a brand while never taking its eyes off of what made the brand great in the first place. Domino’s not only communicates delicious pizza delivery. Domino’s is a brand that we believe does what it says it will do. This can-do attitude generates reliability, honesty, responsibility, transparency, and credibility. Building brand trust helps Domino’s profitably weather our current crisis.
