Domino’s breaks new ground selling user-designed pizzas
The role user-generated content has played thus far in the restaurant world has tended to be in the form of restaurant reviews on sites like Yelp. But Domino’s in Australia is changing that: its fans decide what goes on the menu. The company’s Pizza Mogul app allows customers to design pizzas to their own personal specs, and the company has been crowdsourcing its menu from the home-designed pies. The initiative, part of what Domino’s Group CEO Don Meij referred to in a statement as the company’s "People Powered Pizza ethos" has been a proven success and a huge sales driver.
The Pizza Mogul app, which launched last July, allows users to customize a pizza by choosing from a drag-and-drop list of ingredients. Users are then encouraged to advertise their creations on social media outlets so that other people can purchase them.
Perhaps the most daring thing about Domino’s new crowd-sourced model is that the people who design pizzas through the Pizza Mogul app receive a percentage of the sales of the pizzas they design.
According to an article in CMO, users are paid between $0.25 and $4.50 every time someone buys one of their customized pizzas.
The Wall Street Journal reports that 55,000 people have signed up for the Pizza Mogul app since its launch, and users have added a total of 160,000 pizzas to the menu. The article further reports that Domino’s net profits rose 67 percent for the six months through December, to $29.1 million A.U. ($22.6 million U.S.).
Domino’s may be leading the way with this approach among restaurants, but it is not the only company that is giving customers a shot at designing products. According to a TechCrunch article, an online Lego set sharing platform called Pley recently rolled out a crowdsourced Lego set creation platform called Pleyworld. The site allows users to post images of Lego figures they have created to be voted on. If a creation reaches 5,000 votes, Pley produces a set based on the design, which is then made available to rent or buy. Users do not receive any payment if their submitted idea is turned into a set.
On the higher-end side of the spectrum, Detroit-based Canvas Watch Co. makes wristwatches based on user-submitted designs. The Canvas Watch Co. website indicates that watches are voted on by the community, and when a watch is selected, it is created in a limited-edition batch of 250.
- Crowdsourcing Helps Domino’s Pizza Serve Up Rise in Profit – The Wall Street Journal (sub. required)
- Pizza Mogul co-creation campaign drives Domino’s sales – CMO
- ‘Netflix For Lego’ Pley Launches A Kit Crowdsourcing Platform And Raises $10M – TechCrunch
- Canvas Watch Blog – Canvas Watch Co.
- Canvas Watch Co: How It Works – Canvas Watch Co.
Discussion Questions
Could a crowdsourced social media design model be as successful for retailers outside of foodservice as it has been for Domino’s in Australia? Are there foreseeable downsides to the model for designers, companies or consumers?
The customization trend for foodservice is well underway. This is true if it’s adding flavors to their coffee or to their fountain drinks or having their sandwich MTO (Made To Order). It harkens back to “Have It Your Way.” What Domino’s has done is make it easier for their customers to do. In addition, they provide the customer with ego and financial incentives to share their creations.
This works as long as their customer is customizing with a limited number of ingredients. The object of a restaurant’s menu is to offer as many choices as it can with as few ingredients as possible.
This may seem to fly in the face of the current trend towards menu simplification but it does not. That trend supports this concept by limiting the number of ingredients. Where the two conflict is that the more customization, the more time and effort it takes to prepare the pizza.
I fully expect Domino’s to bring this concept to the U.S. where many young people want to share everything with the world. This is a perfect match for the over-sharing trend.
First, I feel like this has already been done. Didn’t Pizza Hut do this when they first launched their app a couple of years ago? People could share their pizza orders and other people could follow or order or share?
Regardless, I have mixed feelings about crowdsourcing, and it seems that RSR’s research is finding the same among retailers. There are places where it can work, and foodservice is definitely one of them. Crowdsourcing works to verify pricing or initial demand for a fashion design. But if you ask the crowd to come up with something new or original or radical, you may be let down.
So as long as you recognize its constraints—a “crowd” leads you to average, not to outstanding—then I think it should play some kind of role in almost every enterprise. It’s always good to listen to your customers.
Crowdsourced ideas are nothing more than market research. Manufacturers have used market research for years successfully. Retailers pay for market research studies and put the report into a desk drawer. Getting closer to your target market and customers is always a good idea. But caution must be used. If the crowd information is not from customer or is from competition a retailer can be led down the wrong path. Additionally, if the crowd represents only a very small segment of the customer base it can skew the results.
With some modifications, a crowdsourced social media design model could be very successful for retailers. I see this working particularly well for toys and teen fast-fashion chains (because, as we all learned from “Big”—all toy companies would benefit from having a child choose what toys to bring to market!) The fact that this incorporates market testing into the process would save time and, even if the amateur designer gets a cut of the profit, it would still cost less than a professional.
However, this design model will cause a strain on the relationship between retail and their professional designers and, down the road, could lead to a decline in quality and unsatisfied customers.
I don’t think I will surprise anyone when I say that I think this is a great idea, as long as it is used in moderation.
Just as 3-D printers give small companies, entrepreneurs and individuals the ability to make anything they want putting design firms and manufacturers at risk, so too can crowdsourcing put designers at risk. However, for crowdsourcing that assumes everyone has a good eye, wants to take the time to participate and likes what the crowd likes. While 3-D manufacturing fosters differences, the crowdsourcing idea emphasizes creating and having available what most people want. This approach certainly is consumer-centered for most consumers but may not have products available for those who want to make a different choice. Consumers may or may not sustain their interest in the activity so there is still a question whether the consumers will continue this activity or were interested in the novelty.
Dominos’ experiment may not work for all companies in this form. However, it does present food thought for all companies because this approach does allow Domino’s to hear what consumers want, involve consumers in the experience and can reward consumers while making more profit themselves.
It would seem this is all dependent on the cost of customization. “Custom” could be used to describe most restaurant pizza orders. The biggest difference is the availability of ingredients.
The other factor is the complexity of the manufacturing process. Pizzas are essentially “custom-baked” now. But other companies with more rigid process are finding ways to “customize.” Look at Coke’s “Freestyle” food service dispensers.
The biggest challenge to crowdsourced menus may be maintaining the menus themselves. My “Irish Pizza” (sausages, hash browns and brown sauce) may not be popular enough to warrant printing another bigger menu. But with digital menus that limitation goes out the window as well.
In short, why not?
Like any marketing tool, crowdsourcing has its pluses and its minuses.
I wouldn’t worry about the designers or consumers too much, the company might end up with new costs associated with customization and has to establish rules for design.
Obviously it is easier to crowdsource a food product than it is to say, crowdsource a suit, so I think market realities will temper the applications.
I was lucky enough to attend a presentation by Don Meij, and it was hugely compelling. User-customized food offerings have been an enduring hit at Chipotle, and the Australian Domino’s app, created by ThoughtWorks, has been a game-changer. Expect more of this—customers love it.
Fun, interesting marketing using crowdsourcing as the vehicle. Gets Domino’s lots of press at little cost and helps position their brand as innovative.
They have leveraged an existing feature to make it new and exciting. Who knew that a pizza could be customized with a choice of toppings, crusts, cheeses?
Next thing you know they will crowdsource delivery. Heck, crowdsource cooking and call it homemade …
There’s a reason why most companies turn to professionals for marketing, advertising and product design, rather than turning to friends, family or the person on the street (hint: it’s not because it’s cheaper or easier).
That having been said, this evolution in market research—as Mr. Dell correctly describes it—can serve a purpose, but the challenge is to manage expectations. Offer every yahoo in the world the chance to be a designer, or even more so earn a reward for doing so, and many will take you up on it…many will also take to social media when their ideas are rejected. Coming soon to RW: a discussion on how to manage viral facebook campaigns from people who can’t understand why a peanut-butter-and-kimchee pizza won’t work.