At the 2014 Consumer Electronics Show in Las Vegas, Domino's Pizza (NYSE: DPZ ) unveiled the latest development in its continued streak of technological innovation. A new partnership with Ford (NYSE: F ) makes the Domino's mobile app available for all vehicles with Ford's SYNC Applink system, which allows Ford drivers to order a pizza from Domino's with quick voice commands. This move places the company ahead of Papa John's International (NASDAQ: PZZA ) and Yum! Brands' (NYSE: YUM ) Pizza Hut, neither of which have a partnership like this with an automaker.
How it works
Ford's SYNC AppLink system allows drivers to utilize smartphone and tablet apps within a Ford vehicle. These select apps are controlled by vocal commands given through Ford's SYNC feature on the steering wheel or the vehicle's audio system.
The new Domino's partnership will allow Ford drivers to sync the Domino's mobile app to their vehicle, making for easy ordering of a pizza based on the saved settings in the Domino's mobile app. In other words, customers can develop and save their own pizzas on the Domino's app, then the pizzas can be easily ordered through Ford's SYNC feature.
Julius Marchwicki, who serves as Ford's global product manager for SYNC AppLink, sees the benefit of adding Domino's "to the ever-expanding line-up of mobile apps Ford drivers can use hands-free." Now, says Marchwicki, Ford drivers will be able to have a pizza ready for pickup or delivery "when they are on their way home or heading to a gathering with friends."
What does this mean for Domino's?
All 2014 Ford vehicle models have AppLink. Presently, SYNC AppLink is available on more than 1.5 million Ford vehicles. This represents a significant potential base of customers for Domino's. The challenge will be to engage Ford drivers to download the Domino's app on their smartphone or tablet, build a customer and pizza profile, and of course, order pizzas through the SYNC system.
Digital orders of pizza -- which make up approximately 40% of Domino's total orders -- is the direction the pizza market is headed. Patrick Doyle, Domino's CEO, sees the importance of offering digital ordering in a variety of venues. "Customers want to order using technology," says Doyle, "and on a number of different platforms."
The name of the game is to give customers the most convenient options to order pizza. "To be able to work with a brand like Ford, with its terrific SYNC technology," explains Doyle, "and offer yet another way to bring our ordering app experience to life makes it all the better."
This relationship with Ford is just one piece of the puzzle for Domino's, but demonstrates Domino's commitment to digital innovation in the competitive pizza market. Pizza Hut and Papa John's serve as Domino's primary competitors on a global scale and, like Domino's, both companies dedicate resources to digitally connecting with customers.
Yum! Brands' Pizza Hut -- which makes approximately 40% of its sales through digital venues -- was also on display at the Consumer Electronics Show, touting itself as an 'e-commerce' business. "If you're going to be a big e-commerce player, this is the place to be," says Caroline Musullo, who serves as Pizza Hut's director of digital experience. Pizza Hut says half of its digital orders come from mobile devices, such as smartphones or tablets.
Papa John's has been a proven technological innovator in the pizza field for much of the company's 30 year history, although the company was not present at the 2014 Consumers Electronic Show. 45% of Papa John's revenue comes through digital venues. Papa John's was also the first major pizza joint to offer text message pizza ordering, and now makes over $5 billion in total sales made through digital platforms.
Foolish bottom line
Forbes is calling the new Domino's-Ford collaboration "the first known fast-food e-commerce app that is integrated with an automotive telematics system." This could give Domino's a leg up on the competition, considering neither Papa John's nor Pizza Hut have any digital arrangement with automakers. The Ford partnership digitally connects Domino's to over 1 million Ford drivers.
Domino's headquarters in Ann Arbor, Michigan, is stacked with over 170 employees focused in technology, the company's largest department at HQ. As Domino's continues to invest in and expand its digital capabilities, expect the company to unveil more digital innovations in 2014.
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