“Pizza places serving up e-tail”

Posted: 12 Sep 2010 01:17 AM PDT

Amazon.com Inc. sells everything from car parts and jewelry to groceries and golf clubs - in addition to the books that first got it started - so it's not surprising that the Internet titan is ranked first among e-tailers.

But Domino's online ordering system has catapulted it to No. 4 e-tailer. And it's giving the Ann Arbor-based pizza seller a big advantage in the marketplace.

A fourth of all Domino's orders nationwide now come online. That, along with the company's new-recipe pizza, has helped Domino's post a profit of $47.1 million through the first half of the year, up 23 percent from a year ago.

Online ordering lets customers get familiar with the menu, take their time ordering, access coupons and calculate calories based on different toppings. It also helps to ensure that no orders are jotted down incorrectly. Then, it allows customers to track their pizza's progress.

"Our customers love it, especially the kids. They get to watch the pizza being built," said Gail Kirby, who has Domino's franchises in Wayne and Westland.

"Whenever I end up talking to one of my online customers, they say, 'Oh, Gail, it says you built our pizza' ... I wouldn't say (it's a) lack of personal touch, because they're having fun with this thing."

Domino's lets hungry customers order their pies online, through an advanced computer system that also updates the salivating masses about who is making the pies, when they are going in the ovens and even the name of the delivery driver.

Four percent of baby boomers and 17 percent of people ages 24 to 34 order food online, according to Richard George, a professor of food marketing at St. Joseph University in Philadelphia.

Dave Cesarini, who owns three Domino's franchises in Ann Arbor and one in East Lansing, said the online ordering system is simply an extension of people's ever-growing reliance on the Internet.

He especially sees this among his many customers who work at nearby universities and hospitals.

"They feel like they're on their computer and they just want to place an order," he said. "I really can't see any downside unless the Internet goes down. It makes our stores run better, because it takes less people to run a store."

(2 of 2)

Domino's started the online ordering in February 2006 and the company has noted that it's given the company an edge.

"We are now America's fourth-largest e-commerce site, just behind Amazon, Staples and Office Depot in terms of the numbers of transactions that are taking place online," Domino's then-Chairman and CEO David Brandon said during the company's third-quarter earnings conference call last fall.

"We have leapfrogged the competition by becoming the leader of online ordering market share. Our growth in online sales has outpaced the category in the last 12 months," Brandon said.

Marco's Pizza in East Lansing tends to get more of its Internet orders from students at Michigan State University, employee Courtney Wilson said.

"We get a lot of online orders, especially on the weekends," she said.

"It's definitely a younger crowd."

Marco's is based in Toledo and offers online ordering at certain locations.

Online ordering also is gaining popularity at the Cottage Inn Pizza in Delta Township, assistant manager Scott Spinner said.

The store didn't get many online orders when Spinner started there two years ago, but it now receives 20 to 30 online orders a day, he said.

The Ann Arbor-based pizza chain offers online ordering at all five of its Lansing-area locations.

"We really like it. It frees up somebody so we don't have to have another person on the phone," Spinner said. "It saves on labor."

In contrast, Detroit-based Little Caesars prefers to stick with ordering over the phone and in the store.

Because pizza is so universal - and its business model is predicated on its delivery system - it is the ideal food for online ordering, said Jeff Elsworth, an associate professor of hospitality business entrepreneurship at MSU.

"The big problem is who has access to the Internet and why would they order pizza over the Internet if the phone's so successful?" he said. "The iPhone and Android has changed all that."

Detroit Free Press writer Zlati Meyer and Lansing State Journal writer Melissa Domsic contributed to this report.

This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php
Five Filters featured article: "Peace Envoy" Blair Gets an Easy Ride in the Independent.