In a move that signals changing consumer behavior, Domino's is revamping its logo and its stores to appeal more to the increasing number of consumers picking up their pizzas.
Russell Weiner, Domino's chief marketing officer, said that Domino's pick-up business has been increasing in recent years, now accounting for about 30% or its sales. Just a few years ago, he said, 80% to 90% of the chain's business was delivery. And since so many more costumers are opting for pick-up, "we want to be a place that people feel comfortable in," said Mr. Weiner. Domino's stores "are not the most welcoming."
He added that the store and logo redesign are the next step in the chain's ongoing effort to revamp its business. Several years ago, Domino's said that its pizza was not good, and in late 2009 and early 2010, introduced its revamped pizza along with a marketing campaign to promote it. Mr. Weiner credited the marketing with helping to change the brand. "A lot of what has helped transform this brand is the ad campaigns. We wanted to bring that into our design." Domino's agency is MDC Partners' CP&B.
Domino's, unlike Pizza Hut, is not known for being a dine-in establishment, and Mr. Weiner said that is not going to change, although some locations may have in-store dining. Depending on the square footage, the new designs may include elements not typically associated with a Domino's store, such as open kitchens where customers can see the pizzas being made, big-screen TVs, kiosks where customers can place their orders, comfortable seating, a counter for grab-and-go items such as salads, and chalkboards where customers can leave suggestions.
About a dozen of the new concept stores have been built in the U.S., and though there's no exact timeline yet, the chain hopes to revamp as many existing stores as possible in the coming years.
Mr. Weiner said that pick-up is the fastest growing part of the pizza category, in part because there are more locations nowadays, and for some Domino's customers, it's more convenient to pick up pizza on the way home. He added that if it's convenient to swing by a Domino's, that saves consumers a few dollars that would otherwise go to tip and delivery fee.
And consumers continue to do that carryout option as the economy slowly recovers. According to a recent Technomic consumer trend report on the pizza category, "bolstered by a recovering economy, consumers say they have increased their dine-in and carryout pizza occasion the most over the past two years. . . . More than two-thirds of consumers now purchase carryout pizza at least once a month, leading carryout to surpass frozen retail pizza as today's leading pizza format."
Domino's began capitalizing on this trend last year, when the chain started offering an early-week pick-up promotion of a large three-topping pizza for $7.99. Mr. Weiner said Domino's continues to offer pick-up promotions.
As for the redesigned logo, it's the first refresh of it in about 15 years. In the mid-90s the chain redesigned the logo to sit on a tilt. In some cases, both in the U.S. and overseas, the new logo will appear without the text that has long been part of it. Mr. Weiner said that for many consumers, the logo is "instantly recognizable," although in some instances the text will still appear.
In the U.S., when the text does still appear in the logo, the "Domino's Pizza" will be replaced with "Domino's" only. Mr. Weiner said that "so much of our menu is beyond pizza right now that we feel like we're more than just a pizza place."
Domino's is the second-largest pizza chain in the U.S. after Pizza Hut, according to Technomic. It has 11.3% marketshare, while Pizza Hut has 18%, and No. 3 chain Papa John's has 7.3%. Domino's U.S. systemwide sales, according to Technomic, were up 2.9% to $3.4 billion, while Pizza Hut's sales were flat. U.S. store count for Domino's was down 0.4% to 4,900. Domino's spent about $185.5 million on U.S. measured media in 2011, according to Ad Age 's DataCenter.