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Some takeaways from Odd Lots on pizza, feat. @TheStalwart @tracyalloway @jonathanmaze
TLDR: Pizza is a fundamentally better value than other cuisines, delivery is integrated natively instead of 3rd party, and @dominos in particular goes the extra mile to do delivery right. https://twitter.com/thestalwart/status/1272931517745020928
TLDR: Pizza is a fundamentally better value than other cuisines, delivery is integrated natively instead of 3rd party, and @dominos in particular goes the extra mile to do delivery right. https://twitter.com/thestalwart/status/1272931517745020928
1. Value
@jonathanmaze alluded to some of the most intuitive reasons why pizza delivery is so robust. The big one from the consumer side:
You can feed your family for $20!
Have you ever wondered why?
@jonathanmaze alluded to some of the most intuitive reasons why pizza delivery is so robust. The big one from the consumer side:
You can feed your family for $20!
Have you ever wondered why?
It’s because cost of ingredients is so low. Compare the markup on pizza to burgers or burritos.
~2.5x-4.5x
~4.5x-5x
6.5x+
This is not a value judgment. This is the market. And that market supports sustainable pizza businesses. https://www.forbes.com/sites/priceonomics/2017/04/07/how-much-do-the-ingredients-cost-in-your-favorite-foods/
~2.5x-4.5x ~4.5x-5x 6.5x+This is not a value judgment. This is the market. And that market supports sustainable pizza businesses. https://www.forbes.com/sites/priceonomics/2017/04/07/how-much-do-the-ingredients-cost-in-your-favorite-foods/
2. Native delivery
Which of these would a restaurant owner consider more efficient and which would they consider higher quality?
In-house drivers operating a hub and spoke model
Freelance drivers matched to deliveries on demand
Which of these would a restaurant owner consider more efficient and which would they consider higher quality?
In-house drivers operating a hub and spoke model Freelance drivers matched to deliveries on demand
Turns out in-house wins on both fronts. Operating your own delivery allows you more control over the experience. It also saves you a boatload of margin that those marketplaces are really not earning.
It’s not ~that~ hard to staff appropriately for this. https://link.medium.com/yKGbvtRln7
It’s not ~that~ hard to staff appropriately for this. https://link.medium.com/yKGbvtRln7
3. Centralized control over ordering experience
Around the time Domino’s IPO’d, they required all franchises to adopt HQ’s proprietary point-of-sale system.
This is a bigger deal than it seems at first glance.
Around the time Domino’s IPO’d, they required all franchises to adopt HQ’s proprietary point-of-sale system.
This is a bigger deal than it seems at first glance.
For virtually every franchise business, there used to be a market for custom POS solutions tailored SPECIFICALLY to each franchise. And if corporate didn’t specify one, you got to choose from several.
Own a few Cicis Pizza locations? There were pre-built Cicis-specific products.
Own a few Cicis Pizza locations? There were pre-built Cicis-specific products.
Toast, Square, Lightspeed, Tock, and a few others have changed the game significantly this past decade.
When Domino’s made this change, they weren’t options yet. But by expending this extra few % of effort, they removed major barriers to new functionality and service.
When Domino’s made this change, they weren’t options yet. But by expending this extra few % of effort, they removed major barriers to new functionality and service.
By mandating one POS for the whole company, Domino’s installed an Apple-like short circuit into their business and massively lowered the cost to roll out updates and new initiatives in ordering, processing, and delivery. https://twitter.com/efeng/status/1234549368721530881
The result: Domino’s was able to offer an unmatched array of ordering options.
Mobile (and later Watch)
Voice and Smart Home devices
Connected Car
Some of them worked. Others did not. But Domino’s made it possible to experiment with minimal internal costs.
Mobile (and later Watch) Voice and Smart Home devices Connected CarSome of them worked. Others did not. But Domino’s made it possible to experiment with minimal internal costs.
