For Domino's, self-driving cars and drones are about customer service

Nicole Sinclair
Markets Correspondent

Domino’s (DPZ) may be known as a pizza company, but its third quarter report Thursday revealed that the company’s priority is on extending its leadership in delivery.

These days, that means investing resources in research around self-driving cars and drones, CEO Patrick Doyle told Yahoo Finance.

“Our strategy remains simple. Single-minded focus on continually improving every aspect of the experience for our customers and funding those investments by skipping the flavor of the month activity so common in our industry,” Doyle said on the company’s earnings conference call.

Domino’s has long been a leader on the ordering front, with about 60% of its sales coming from digital. Its top-rated app, along with the ability to order through Facebook (FB), Twitter (TWTR), or text via its AnyWare platform, has boosted sales (the company saw an 8.4% domestic same-store sales growth in its most recent quarter). This quarter, the company announced the ability on Amazon’s (AMZN) Alexa to order from scratch without needing a preset profile or saved easy order.

But the big long-term opportunities remain ahead with delivery. Domino’s August self-driving partnership announcement with Ford (F) reflects a priority for the company, Doyle told Yahoo Finance.

“It’s great when we get attention from doing some of these things, but the point is not the attention that it brings to the brand,” he told Yahoo Fiannce. “The point is that we’re spending a lot of time figuring out how we can improve the customer experience.”

Doyle explained that while much of the timing of technology is dependent on Ford and regulators, he wants Domino’s to be ready as soon as technology hits, which he sees as soon as three years from now.

“Our job is to make sure that we understand how we’re going to be able to adapt it to the customer, and how it’s going to play into our business, and how we can make sure that we’re going to be ahead of the curve on this,” he said. “We are confident it’s going to come and we’ve got to understand how we’re going to leverage it for competitive advantage when it does roll out.”

Doyle added that Ford is moving this along quickly and Domino’s headquarters in southeast Michigan is an advantage, allowing the company to be near where much of this work is happening. And first-mover efforts like this should advantage the company, according to Doyle, just like the company’s early investments into natural-voice ordering four years ago did.

“We were out doing that ahead of everybody else and the first people taking commercial orders with natural voice,” Doyle said. “Our very developed abilities in that area have given us competitive advantage as natural voice is becoming more and more a part of how people interact with technology… We are equally confident that self-driving vehicles are going to have a material impact on transportation.”

Doyle also said they are looking seriously at drone delivery, particularly via a master franchisee based out of Australia, which is doing work in New Zealand where the regulatory environment is easier.

“My guess is that you will see autonomous vehicles before you would see widespread adoption of drones, but we’ve got to place a lot of bets and look at all these different options and understand them and the implications of them,” Doyle said. “We’re looking at all the different possibilities.”

One thing’s for sure: Doyle is using data and technology across it’s business to better-serve customers.

“We have pretty extraordinary data based on our model and used that actively to kind of model out our business,” he said on the conference call. “So we know pretty precisely what’s driving our business. We are not going to share that because we don’t want to help our competition make better decisions around their business.”


Nicole Sinclair is markets correspondent for Yahoo Finance

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