Published on the 29/08/2013 | Written by Newsdesk

The quick service retail company invested millions in e-commerce when others thought it was a joke but it proved to be the perfect growth recipe for the pizza franchise…

Six years ago Domino’s Pizza senior management decided to invest heavily in e-commerce. At the time only one percent of its orders came through the online channel, but the Group CEO was adamant that it was the way of the future. Today, the company processes 50 percent of its orders online and it expects that to grow to 80 percent in Australia and New Zealand over the next couple of years.

“Our Group CEO saw that online was going to be the future so we are investing millions of dollars and at the time some people thought we were crazy, but we invested ahead of the curve and now it is paying off,” Andrew Rennie, CEO for A/NZ, told iStart.

Rennie puts much of the company’s success in digital retail – it is currently the number one digital retailer in Australia and the technology in the Domino’s A/NZ region is deemed best in class, better even than its Japanese sister franchises – down to forward thinking and a willingness to invest tens of millions of dollars in projects that may not have an immediate ROI and would have many CFOs balking.

If you think purely in terms of near-term ROI, he says, you would never do anything. Domino’s currently has projects that are not producing any return on investment – yet – but other investments, made two or three years ago are now bringing in a good return. The company has a multitude of digital offerings for customers including a brand-new website and iPhone, iPad and Android apps.

Rennie highlights the company’s Pizza Tracker, which allows customers to plan, lodge and track their order online or via mobile, as particularly successful. “It gives people back time,” he explains, “it de-stresses the whole situation because you are in control”. The HTML5-based website refresh is another huge investment that has paid off for the company, creating a 10 percent increase in online sales for New Zealand and approximately five percent for Australia.

The investments have not simply shifted sales from one channel to another but the ease of use and practical customer solutions have also increased sales, leading to a 20 percent higher ticket average and the creation of 500 new jobs to meet the nationwide demand for deliveries.

Domino’s team of 75-plus IT guys, along with senior management, is constantly researching new opportunities.

They work closely with Google and have more than a million Facebook Page fans. They are currently looking at ways to improve the Facebook pizza purchasing experience and are also exploring NFC-enabled payment possibilities. For the last couple of years, their technology has been hosted in the cloud allowing them to speed development and invest more in the frontend software rather than backend infrastructure.

To be successful in digital retail Rennie says, “you want to avoid in investing in yesterday’s technology”.

“You’ve really got to be investing in tomorrow’s technology, so don’t get caught up in investing in what’s hot now you’ve got to invest in what’s hot next year.”

For Domino’s Pizza, and entirely online retail operation is a possibility, but it’s a long time away. “Perhaps in one or two generations of human changes, that could very well be the case,” says Rennie.

“With things like Google Glass we are going to a whole new space-age steer where it will just become a normal part of life. Whist it seems foreign to some people now, 20-30 years away it could just be a normal part of life … You have to always think of the new generation.”