How Did Dominos Dominate
Chances are if you are watching a game with friends or family you or someone in the group have said “Let’s order Domino’s”. They have over 17,000 locations globally in 90+ countries. How exactly did Domino’s dominate the pizza industry? and how did they keep up with the trends and stayed on top of the pizza market?
Dominos started out with two brothers because their father had passed away and their mother couldn’t handle raising them by herself they grew up in a Roman Catholic orphanage. As time went by, the brothers Tom and Jim Monaghan decided to start out a venture of their own. They borrowed $500 and bought “DomiNick’s” a pizza store in Ypsilanti, Mich in 1960. The brothers decided that their business model would be based on delivery. As that eliminates the expense of dine-in and forces them to work purely on quality. They hired local laid-off factory workers to deliver around town.
After about eight months of operation, James decided to trade half of the business for a Volkswagen Beetle and walked out. Tom was now the sole owner of the pizza shop. One day the original founder walked into the shop and told Tom that he can no longer use the name “DomiNick’s”. Tom had no choice but to come up with another name, one day a delivery driver walks in and suggests Dominos. And so the first Domino’s store was opened in Ypsilanti, Mich in 1967. The logo originally had three dots which represented the three original stores in 1965, Tom wanted to add a dot for every new store, but they soon realized that adding a dot could cost them more money and, imagine if you were to drive by a dominos and it had 17,000 dots, it may look odd.
In the mid-1960s, Tom wanted his customers to enjoy their pizza, hot and fresh. He got in touch with a company to develop the modern pizza box. As time went by Tom realized that customers who order pizza should not only get the best quality but should also get it quickly. And so Domino’s introduced a guarantee pizza delivery in 30 minutes or less. To keep up with the promise, Tom bought a pizza store where ever he could, creating a network which meant they could deliver on their promise of 30 mins, no matter where the customer calls from. With the 30min promise, Dominos was delivering 54% of all Pizza orders in the United States. Today Dominos delivery drivers cover 10 million miles each week, that’s equivalent to 20 trips to the moon and back. Tom was also known for his temper, he once said that “I didn’t take abuse from anyone. If someone refused to pay a driver for an order, I didn’t call the police. I just went and demanded the money”
By 1978 Dominos had 200 stores across the US. Tom made his first delivery from a new store he had set up in Mount Pleasant, Michigan. The order was for the Central Michigan University, little did Tom knew this delivery would bring someone special in his life, when he arrived, the woman working at the reception desk, Margie became his wife.
Sadly because of their 30 minutes delivery guarantee, their employee death rate skyrocketed and in the US, the 30-minute promise was discontinued, though many countries still have that in place.
By 1983 Domino’s had 1000 stores, their first international store opened in Winnipeg, Canada. Domino’s became the fastest-growing pizza company with 2,841 stores. In 1989 Domino’s opens its 5,000th store. The company reaches record sales of $2.8 billion in 1996. By 1997 Domino’s was opening seven stores in one day across the globe. And in 1998 Domino’s founder, Tom Monaghan, announces his retirement to pursue other interests, and gives up the ownership to Bain Capital Inc. In 1999, Domino’s worldwide sales exceeded $3.36 billion.
In 2004 Domino’s becomes a publicly-traded company on the New York Stock Exchange. For Domino’s this was just the start, they wanted to dominate the pizza market. In 2007, for customer convenience, they introduced online and mobile ordering.
But then the 2008 Recession had its effects on Dominos. Not only the sales were going down but the chain was under siege for its lousy food and mediocre service. Domino’s stock went from $13.49 to $3.87 per share. Domino’s ran ads promising a better service in the coming days. The company knew in order to improve the service they had to make it easier for customers to order. The cell phone usage was increasing dramatically, 77% of all adults had a cell phone or other mobile device. With the mobile ordering already available, Dominos knew they had to make ordering a pizza, cooler for their customers, so in 2008 Domino’s launched the Domino’s tracker, allowing customers to follow the progress of their order.
With the second iPhone release, the use of mobile phones jumped from 72% to 84% among teens. Knowing that the world is making a shift to apps, Domino’s introduces an app for iPhone and Android users to order their favorite Pizza. Domino’s then introduced the Pizza profiles on dominos.com, which saves customers information on their favorite pizza so that they can reorder their favored slice with few clicks.
To give their customers even more options in 2015 Dominos launched AnyWare, allowing customers to place an order via text, tweet, voice ordering. In 2018 the company launched another delivery system. Imagine you are at a park, on a beach, playground, or in a museum with no physical address and you crave pizza. With that in mind, Dominos introduces Hotspots. More than 200,000 Domino’s Hotspots are active nationwide so customers can receive delivery orders at spots that do not have actual addresses.
By communicating with their customers and looking out for them, Dominos expanded unlike any other chain; more than 60% of Domino’s orders are now made using digital platforms.
As big as Dominos is, they also help out with various calamities across the globe. Domino’s raised $220,000 to support the relief efforts of the tsunami in 2004 which sadly took 227,898 lives. Because Tom grew up in a Roman Catholic orphanage he has been a major supporter of many Catholic charities. As of 1997 Domino’s has been a national sponsor of Project Safe Place, a network of safe places where young people in trouble can go to request help. Dominos’ story teaches us that if you stay up with the trends and keep communicating with your customers, you can dominate.