Futures

Domino’s Navigates Delivery Challenges and Expands with Electric Vehicles and Training Programs, (from page 20230708.)

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Summary

Domino’s faces challenges in its delivery business, experiencing a 2.1% drop in delivery same-store sales in Q1, attributed to customers choosing dine-in and budget constraints. Despite this, the brand gained market share and improved delivery times. Carryout sales surged by 13.4%, highlighting a shift from non-Domino’s to Domino’s carryout. Overall, U.S. same-store sales rose by 3.6%, driven by price increases. The company is adapting to changes in consumer habits post-COVID, launching a significant training program and introducing electric vehicles to address driver shortages. With over 20,000 units globally, Domino’s continues to expand its presence both domestically and internationally.

Signals

name description change 10-year driving-force relevancy
Shift to Dine-In Dining Customers are returning to dine-in experiences, impacting delivery sales negatively for Domino’s. Shift from delivery and carryout back to dine-in dining experiences. Potentially more restaurants could focus on enhancing dine-in services and experiences. The resurgence of social dining experiences post-COVID as consumers seek social interactions. 4
Electric Vehicle Delivery Fleet Domino’s has launched the country’s largest electric vehicle delivery fleet to combat driver shortages. Transition from traditional delivery vehicles to electric vehicles for deliveries. Widespread adoption of electric delivery fleets among food service businesses for sustainability. Increasing environmental awareness and regulations pushing towards electric vehicle use. 5
First-Party Fulfillment Commitment Domino’s remains committed to first-party fulfillment despite using third-party services. Shift from reliance on third-party delivery services to more direct fulfillment. Potentially more restaurant brands may prioritize in-house delivery services for better control. Desire for better customer service and brand loyalty through direct fulfillment models. 4
Technological Innovation in Ordering Introduction of in-car ordering through Apple CarPlay to streamline the ordering process. Evolution from traditional ordering methods to integrated technology solutions. Increased reliance on technology for seamless customer interactions in food delivery. Advancements in technology and consumer preferences for convenience and efficiency. 3
Franchisee Training Initiatives Domino’s is implementing a large-scale training program for U.S. franchisees. Shift from general operational practices to focused training programs for franchisees. Franchise models may evolve to include more structured training and support systems. Need for improved service quality and operational efficiency in franchise businesses. 3

Concerns

name description relevancy
Driver Shortage Ongoing challenges in finding delivery drivers may hinder service efficiency and growth for Domino’s. 4
Shift in Consumer Preferences A return to dine-in dining by consumers reduces demand for delivery services, impacting sales. 5
Dependence on Carryout and Delivery Domino’s reliance on its carryout and delivery model is threatened by changes in consumer dining habits. 4
Impact of Inflation on Consumer Spending Inflation is tightening consumer budgets, affecting order volumes and preferences for cheaper dining options. 5
Technological Adaptation Challenges While innovations like in-car ordering can help, there’s a risk of technological implementations not meeting consumer expectations. 3
Environmental Concerns with Delivery Vehicles Investing in electric vehicles aligns with sustainability but requires assessing overall environmental impacts and infrastructure. 3
Franchisee Training and Support The effectiveness of large-scale training programs in enhancing service quality and operational efficiency needs continual evaluation. 3

Behaviors

name description relevancy
Shift to Dine-In Consumers are returning to dine-in options, impacting delivery sales for chains like Domino’s. 4
Trade-Down from Non-Domino’s to Domino’s Carryout Customers are opting for Domino’s carryout over other options due to budget constraints. 4
Investment in Electric Vehicle Fleet Domino’s launched the largest electric vehicle delivery fleet, addressing driver shortages and sustainability. 5
Integration of Technology in Ordering Introduction of in-car ordering through Apple CarPlay enhances customer convenience in placing orders. 4
Large-Scale Franchisee Training Programs Domino’s initiated a significant training program for franchisees, emphasizing operational improvements. 3
Focus on First-Party Fulfillment Despite third-party partnerships, Domino’s remains committed to its own delivery service model. 4

Technologies

description relevancy src
Allows customers to place orders via their vehicle’s interface, enhancing convenience and integration with daily routines. 4 07091cec2b85e059cd1a0fa65cbcfed4
Utilizing electric vehicles for deliveries to reduce emissions and operational costs while addressing driver shortages. 5 07091cec2b85e059cd1a0fa65cbcfed4
Focus on internal delivery systems rather than relying solely on third-party aggregators, improving control over service quality. 4 07091cec2b85e059cd1a0fa65cbcfed4
Large-scale training initiatives to enhance service and operational efficiency across franchises. 3 07091cec2b85e059cd1a0fa65cbcfed4

Issues

name description relevancy
Driver Shortage in Delivery Services The ongoing challenge of finding delivery drivers could hinder growth in the quick-service restaurant sector. 4
Shift to Dine-In Dining A significant consumer shift back to dine-in options post-COVID may impact delivery sales for pizza brands like Domino’s. 5
Electric Vehicle Adoption for Delivery The introduction of electric vehicles in delivery operations could set a precedent for sustainable practices in the restaurant industry. 4
Inflation Impact on Consumer Behavior Consumers are trading down to more affordable carryout options, affecting sales dynamics for premium brands. 4
In-Car Ordering Technology Advancements like in-car ordering through platforms like Apple CarPlay may redefine customer ordering experiences. 3
Franchise Training Initiatives Large-scale training programs for franchisees can enhance operational consistency and service quality in the delivery sector. 3