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Painful past lessons helped Domino's stare down COVID-19, CEO Ritch Allison says

The pizza chain drew strength from a crisis that erupted 12 years ago.
Photograph courtesy of Domino's

If it wasn’t for bad pizza and an internal crisis long ago, Domino’s responses to the pandemic might’ve been uglier, CEO Ritch Allison confided in his contribution to the Restaurant Recovery Summit, a virtual conference focused on restaurants’ responses to the COVID-19 crisis.

In the instance of Domino’s, Allison explained, a chain noted for its innovation had to speed up the brainstorming process, “rewriting 60 years of operating procedures in about six weeks.”

“We’ve learned some things about ourselves as a business,” Allison commented during an interview with Restaurant Business Editor in Chief Jonathan Maze. “Although we thought of ourselves as an innovative company, we’ve learned how to work even more quickly, because we had to.”

Much of that had to do with technology. “It required us to reshuffle our technology roadmap for the year and pull forward on some things,” Allison continued. “A significant amount of our work today is focused on how do what we do inside of our stores, and between our stores and our customer’s door, more efficiently.”

For instance, “think about how, when an order comes in, that order gets to our make line,” he said.

With the flurry of adjustments, and consumers clamoring for contactless ordering, “we immediately leaped from 70% digital to 75% in the U.S.,” Allison divulged.

Not all of the innovations were high tech, he stressed. Among the operational changes adapted during 2020 was the addition of curbside delivery, or bringing pizzas to customers’ cars instead of having them come into a unit to retrieve the pies.

He also spoke with evident pride of what Domino’s calls its Pizza Pedestal, essentially a box several inches high that delivery drivers set outside a customer’s door to serve as a platform. A pie, still in its regular box, is placed atop the pedestal, elevating it from the stoop or floor so it doesn’t get wet or dirty when the customer asks the driver to leave the pizza without any interaction.

Both high and low-tech innovation would have been far more difficult, the CEO said, if Domino’s hadn’t contended with a crisis 12 years ago. At the time, Domino's sales were flagging, the company’s stock price was moving in the wrong direction, competition was soaring, and the brand wasn't well-received by consumers.  One of the core problems, the company realized at the time, was that its pizza was awful.

It famously admitted as much in an advertising campaign that announced the substandard product had been upgraded from crust to topping to improve its taste. The unorthodox move ignited a resurgence of the brand and a long run of stellar financial results.

“It really did take a bit of a crisis situation,” Allison said. “That moment gave a lot of confidence to the organization that we could change. [Now] we believe we can do anything we put our minds to. 

“That really helped us a ton in 2020 as we’ve had to move so rapidly to adapt to this COVID environment,” he continued. “We already had those muscles built within the organization.”

Right now, said Allison, “we are adding a lot of automation and machine learning in our stores. We’ve not done a lot of automation with the actual making of the pizza. But if you go into our supply chain business, we’re going into a lot of automation in how we make our dough balls and get it out to our operators.”

As for future market conditions, “I suspect that we’re looking at another six months or so of operating in this sort of environment,” Allison said, noting that time will be needed to distribute vaccines to the population as a whole.

“I don’t know what the new normal is going to look like,” he added. “It’s probably not going to look like the old normal or what we see here in the fourth quarter.”

In any instance, it's not likely to be a rerun of 2020, thankfully. "It's been one heck of a year," Allison said.

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