Domino's Delivery Deal?

The Lempert Report
February 08, 2022

In a rather brilliant marketing move, Domino’s has announced that they will give customers $3 to not have their pizza delivered – and pick it up instead. Whole bunch of reasons here: first the shortage of Domino’s delivery drivers, and second – and perhaps more importantly – there is no way that Dominos can deliver a pizza to me for $3. Domino’s, like every other foodservice operator, is faced with higher costs – labor increases, ingredient price increases, increased fuel cost to drive those deliveries, in fact they cut the number of chicken wings in a package from 10 to 8 so there wouldn’t be sticker shock by increased prices. The $3 discount – or what Domino’s is calling out “tip” is good on your next order…and while we don’t know the rate of redemption just yet – it should prompt repeat business. But I must wonder if $3 is enough in the consumers mind. When they start to add up the numbers it appears that Domino’s is going to make a lot more dollars on pick up versus delivery – and will customers say – hey for $3 the convenience is worth it to have delivery. The cost for me to get in my car, drive there, pay for the gas, is much more than $3. But there is a lesson here. One that we have talked about for quite a while. As supermarkets move to push shoppers to click & collect and away from delivery, shoppers will want a reward. Yes, it could be the $10 that on average a supermarket loses on each delivery order – or maybe we need to put on our marketing hats? How about developing a rewards program for those who opt to pick up? Collect points that build to rewards – for free product, discounts, swag? Grocery retailers need to offer inducements for shoppers to do curbside pick-up – otherwise what could be a good, stable, and profitable business may never achieve its potential.