"Let me repeat that. We are well on our way to becoming the first national pizza chain to achieve a domestic systemwide digital sales mix of 50%," said Tony Thompson, COO of Papa John's International (NASDAQ:PZZA) during a February conference call. He sounded almost like he was expecting a standing ovation. Papa John's takes great pride in achieving various technology "firsts." But Domino's Pizza (NYSE:DPZ) beat it to the punch lately with the ultimate in lazy and convenience.
And you thought two clicks was easy. Get a load of this!
Papa John's was the first national pizza company to offer systemwide online ordering. It was the first to offer systemwide text ordering. It was the first to offer a digital loyalty-rewards program. It will likely be the first one to have more than half of its domestic sales coming from digital channels as well.
Papa John's loves to use the phrase "technology leadership position" to describe itself. And it deserves it. The company's pioneering efforts have made ordering a delicious pizza from anywhere, anytime the easiest and best thing since sliced pepperoni.
But now, in bit of a funny move, Domino's Pizza announced on June 16 new voice- ordering apps. Two clicks? That's so 2013. Now with Domino's Pizza it takes no clicks. The irony is you just use your voice on the phone to order a pizza. Um, using your phone and your voice to order a pizza? We used to do that back in the day. It's called a land-line telephone.
Joking aside, of course this is beneficial. The app will still have your credit card info, allow you to order from other locations besides home without thumbing through a phone book, remember what you like to order, and most importantly you won't have to be on hold and spell out your address.
You say tomato, I say tomahto
Domino's Pizza and Papa John's love to take shots at each other. For example, Domino's Pizza calls itself the recognized leader in pizza delivery, referring to being the largest chain in terms of sales and locations. Papa John's, in obvious response, calls itself the recognized leader in pizza quality, borrowing the old cliche that quality is more important than quantity.
In the latest release, Domino's Pizza calls itself the "Technology Trailblazer" as a shot at Papa John's technology-leader touting. Patrick Doyle, CEO of Domino's Pizza, stated:
There will be a day when typing on keyboards or with thumbs on mobile devices will come to a close; we want to be the ones who continue to advance the technology experience -- hand-in-hand with our customers.
The release went on to say that it "puts Domino's at the forefront of an intuitive ordering method that is a true first within both traditional and e-commerce retail." A true first? Ouch. That's going to leave a mark on Papa John's.
Boxing it all up
Something really interesting about these two fine companies that are both reporting exploding sales and net income for years now is that both Domino's Pizza and Papa John's are showing us an example of how sometimes when two competitors go at it, the result is actually healthy, mutually beneficial, and helpful for advancement. The technological and shot-taking rivalry between the two has resulted in both of them rapidly advancing their digital technology in an effort to get one up on the other.
The result, according to both of their conference calls, is that they have left the mom-and-pop stores and regional chains in the dust as consumers turn to digital orders more and more, even if it means giving up their more-favored local and traditional pizza store. Expect top- and bottom-line growth for these two to continue for many years, as the smaller competition is stuck in the digital Stone Age.