How Domino’s Used AI to Better Understand Consumer Preferences
Earlier this year, Domino’s made a startling announcement, backed by a full campaign, including television ads: The restaurant chain would give 10 rewards points per week to Piece of the Pie Rewards members who uploaded a photo of pizza — any pizza — to its app. Homemade pizza? That counts. A slice from your favorite neighborhood pizza parlor? Definitely! A pizza-shaped dog toy? Here are your points.
Once customers accrued 60 points, they earn a free medium, two-topping pizza. The company committed to giving away at least 100 million points toward free pies during the 12-week Points for Pies program. That’s a lot of dough for pizza dollars that aren’t necessarily being spent at Domino’s. So what does the company have to gain?
A lot, thanks to artificial intelligence (AI), which can be used to analyze shapes, colors, and texture to determine pizza ingredients, crust type, and more. Then, analysis of the visual data gathered from the flood of pizza pics lends valuable insight into customers’ habits and preferences, cross-referencing the date, time, and location of the pizza against the pie’s toppings, style, and size. It’s the kind of information that, when combined with AI, could have a huge impact on the way the chain does business in the near future and takes on competitors.
What else should we expect from Domino’s in the near future? Expanded use of AI. “Artificial intelligence provides great learning platforms that will enable us to do more to deliver convenience for our customers and better job experiences for our team members,” said J. Patrick Doyle, former Domino’s president and CEO, in a statement last year, adding that the company hopes to become 100% digital in the future.
Domino’s is hardly the only company looking to AI to improve its customer experience. Companies are expected to be spending $57 billion on AI platforms by 2021, according to the “Worldwide Semiannual Cognitive Artificial Intelligence Systems Spending Guide” from International Data Corporation (IDC). So what lessons can marketers take from Domino’s pizza party to bolster their own AI campaigns?
Tweak Your Brand Experience
More than 60% of Domino’s U.S. orders are placed via digital channels — that’s, in part, due to the company’s willingness to experiment.
In April 2018, the brand allowed users to order via Snapchat and, in November, it launched New Pizza Chef, an in-app, AR-powered pizza builder that allows for more than 1 billion possible combinations to be created and then ordered. Domino’s is really taking the idea of reaching customers whenever, wherever they want to a whole new level, thanks to AR.
What you can learn: Don’t be afraid to test the waters with small-scale AI campaigns that push boundaries. While some Domino’s campaigns may be created more as a gimmick than as a serious business move — such as its 2016 Japanese campaign in which pizzas were delivered via reindeer — its “throw-it-at-the-wall-and-see-what-sticks” approach allowed the brand to surpass Pizza Hut’s market share for the first time in 2018.
Target Individual Customers
The Points for Pies program could uncover some fascinating trends. Domino’s might discover that diners in Atlanta love eating cold pepperoni pizza for breakfast, or find that customers in Denver have a craving for mushrooms and olives at midnight. It could use this information to specifically target individual users based on their preferences or recognize trends among others with similar tastes and demographics.
What you can learn: Machines can analyze huge amounts of data, whether visual, numerical, or behavioral, and help businesses understand trends and patterns with great accuracy and speed. Your company can turn this data around into buyer personas that help fuel product development and personalized marketing campaigns.
Target Your Competitors
Domino’s is already besting Pizza Hut with the Points for Pies program, but there’s always room for growth of market share. The chain could use the information it collects regarding where users took a photo (location) — as well as analyzing the photo to deduce pizza brands — to target competitors from an advertising/marketing perspective. If a lot of people are posting photos from a specific competitor, Domino’s could specifically create campaigns targeting this brand.
What you can learn: Gathering insight on your competitors doesn’t mean copying their every move. Instead, learn from what they’re doing right, and iterate. Apply your brand’s personal flavor, heighten the experience, and invest in strategies that will drive traffic.
The Final Topping
The power of data and AI provides a lot of opportunities for businesses to learn about their customers’ habits and preferences, and adapt their strategies to capitalize on this information. Even if your brand isn’t serving personalized pizza, these insights can shape its future in ways both monumental and incremental.
Take it directly from Domino’s data-based decision-making that saw sales more than double from $3.2 billion in 2010 to $6.6 billion in 2018.
“I don’t have to make gut calls, because we’re listening to the customer and collecting that data to make the decisions,” reads current Domino’s CEO Ritch Allison’s quote in Forbes. “That translates into our relationship with our franchisees. We don’t tell them, ‘we think you should do this.’ We bring the data and the franchisees trust us.”
Related story: WWTT? Domino's Uses AI to Collect Customer Preference Data
Mukesh Pitroda is the delivery director at Nerdery, a Minneapolis-based digital consultancy. He has more than 20 years of demonstrated success helping businesses create effective strategies and innovative solutions to increase engagement and operational efficiencies. His expertise centers on healthcare and technology, and he's an eager learner currently absorbed in the world of IoT, AI, and blockchain.