Don Meij, CEO of Domino’s Pizza Enterprises, reveals how – and why – his industry-leading brand has adapted to a faster, more mobile world.
“When you’re first, you don’t just get 20 or 30 percent... you get the market, because the customer is there.” So said Don Meij, CEO of Australia-based Domino’s Pizza Enterprises, at Google’s Think Mobile event in Sydney in September 2011. Meij could have been talking about any one of Domino’s industry-leading business moves, but today he was focussed on consumers’ rapid move to their mobile devices. “The day we switched on our mobile site, with no advertising, it delivered four percent of sales. In a mature business, a company that’s 50-years-old, in a mature product category like pizza, to switch on a mobile site and get four percent of sales, it just says the customer is already there. They’re looking for us on their mobile all day, every day, we just haven’t been there.”
Anyone with a smartphone is probably surprised to hear that Meij’s comments even need to be made. Smart mobile devices have become an extension of ourselves, something we couldn’t imagine living without, whether for watching videos, searching the web, or connecting with friends. But many businesses seem not to have taken action on this phenomenon, even in Australia, where, according to a Google/Ipsos study, 37 percent of the population owned a smartphone as of Spring 2011.
That’s the second highest adoption of 30 countries studied, and Australian research firm Telsyte expects this stat to cross 50 percent by the end of the year. Asked why many businesses have been slow to adapt, Meij answers, “I honestly think most CEOs can’t see it. When I walk in CEO circles, I’m shocked that most of them think the mobile is a limited device. People refer to the small screen size or ask, ‘How do you transact?’ It’s so many paradigm shifts at once that they can’t see the investment case. For me, it’s completely the opposite.”
Indeed, Meij and Domino’s have rapidly adapted to a more mobile world. Their journey began four years ago, in 2008, when “the early data that Google presented to us inspired us to get into mobile. The idea that mobile would dominate was just so compelling. I knew then that PCs were going to be a part of the past.”
Don continues: “I went to my board and said, ‘Look, I reckon this could be something really big for us – the smartphone is more than just a novelty. Apple is educating consumers to consume through iTunes, why wouldn’t that work for pizza?’” His team developed an app using Domino’s famed ‘pizza tracker’ technology – invented in Australia – which allows customers to see, in real-time, where their pizza is in the preparation and delivery process, and to know when it will arrive. “After we launched the app in November 2009, we earned seven times our initial capital expenditure in just the first few weeks,” Meij reveals.
The evolution continued in 2010 when Meij’s team launched a special version of their site for the visually impaired. It had a simpler design, with less text in larger type and an easier purchasing process. “When we launched the site, we were quite surprised to find that the largest take-up was by mobile device users who had perfectly good vision,” Meij says. He realised that it was no longer enough to have an app for iPhone. “Whilst we only had the iPhone, for every other mobile smartphone platform, customers were just desperate for the opportunity to place an order via their smartphone.” As a result, Meij’s team launched a mobile-optimised website, earning over $1 million in the first week. Most recently, they launched an app for Android – their most advanced app to date. Today, mobile purchases represent 15 percent of Domino’s total revenue. Meij expects this proportion to grow to 60 percent – yes, 60 percent – within four years.
Asked whether Domino’s is content with its current pace of mobile adoption, Meij says, “Half of our capital expenditure is on digital, of which most is dominated by mobile, and I’m still a frustrated guy – it’s not nearly enough. Someone said to me, ‘Geez, you guys are so innovative, you’re rolling all this stuff out so fast,’ and I’m saying, ‘We’re not going nearly fast enough.’”
” “After we launched the app in November 2009, we earned seven times our initial capital expenditure in just the first few weeks.”
What has allowed Meij and his team to adapt to a new marketplace with such speed, while other businesses have lagged? It could have something to do with the deep integration of the company into Meij’s DNA. His career began over 25 years ago when he started at Domino’s as a delivery driver. He rose through the ranks to become a franchise owner, and finally CEO. “When you’ve been around for 25 years, you see the highs and lows, you realise that your business has never actually ‘arrived’. You’re never finished, and if you think you have, you’re actually dying. We’re in our third reinvention of the business right now. We’re turning the business upside down from a technology perspective, we’re renovating our stores, we’re overhauling our products – for example, we absolutely believe that you can make a really tasty pizza that’s also really healthy.”
Something in this philosophy clearly works. Today, Meij runs the largest pizza chain in Australia and the largest franchisee for the Domino’s brand in the world (the brand is owned by the eponymous chain based in the US). He oversees over 21,000 employees in more than 900 stores, including over 300 in New Zealand, France, Belgium and the Netherlands. Domino’s is number one in each market.
While moving fast as an organisation was critical to Domino’s success on mobile, Meij also recognised that it was critical to create the fastest, most convenient customer ordering process possible. “We have the largest real-time delivery business in Australia. It needs to be fast and it needs to be efficient. In Australia, you’ll have that pizza delivered, on average, in 24 minutes.”
Meij applied the same thinking to mobile ordering. “I think one of the biggest problems is that people try to put too many games and novelties into the mobile experience,” he says. “The producers of software and hardware have made some fun toys, but you have to use them for real needs and focus on what users want – in this case getting a pizza.” Even the app download experience was as fast as possible. A competitor’s app had a file size 56 times bigger than Domino’s, causing the consumer to wait significantly longer before being able to order a pizza.
“The producers of software and hardware have made some fun toys, but you have to use them for real needs and focus on what users want – in this case getting a pizza.”
Asked how mobile ordering will become even faster in the future, Meij points out that “the mobile processing speed is getting faster, broadband is getting faster, and mobile software is getting smarter.” He also predicts a move towards even better mobile websites, and away from apps. “In these early days, you need to have both apps and a mobile website, but we think apps will peter out a bit, just like SMS and email,” he says. “Apps mostly exist today because HTML is pretty poor, it doesn’t fulfill the customer’s need. It’s slow and web pages have to reload with most user actions. The next version, HTML5, allows you to do pretty much everything you can with an app, and you don’t need to download a website from an app store, you just go to it in your browser. This will also help us move faster in rolling out mobile features as we won’t have to maintain multiple apps and can instead focus on our mobile site.”
Moving fast into mobile has allowed Meij’s business to differentiate against a crowd of competitors, and he shows no signs of stopping. “We live in an environment that is very commoditised. Pizza isn’t a new food, it’s been around a long time. In our space, a competitor can open a pizza shop for $20,000 and take customers. Digital and mobile is a place where we can do some unique things for customers. And just like our customers, if we’re not on mobile it will be hard to survive.”