It's a big wedge and it ain't sharing
Published: 10 December 2007 10:38 GMT
Last week, fast-food chain Domino's Pizza made £1m from online sales in one week alone. The thinking behind the service is that when people are online and fancy a pizza, rather than switch communication medium to the phone, they would prefer to order online.
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If you have already set up an order profile on the Domino's site, ordering is easy as pie, apparently. And the results speak for the business model. According to the chain's marketing director, some of his stores are now doing up to 30 per cent of delivered sales through online orders. Across the board, the proportion of online sales to total revenues is 15 per cent - and steadily climbing.
Online business is growing so rapidly the chain is likely to review its property portfolio to see whether it can move some of its estate off the high street and on to less expensive premises.
Even five years ago selling music online looked like a fairly shaky proposition. Clothes? Hmm, probably not. But pizza, are you out of your mind? A cool million in a week and the proposition looks not so much extra cheesy, but American hot.
Essentially, it's not even a new idea - the logistics of online food ordering was thrashed out by the likes of Tesco, Sainsbury's and Waitrose. Making sure it's delivered 30 minutes after it leaves the premises or less is just taking the business model a stage further.
Given that the business model has been worked out, the market has been demonstrated and the real revenues are a matter of public record, the only thing that remains puzzling is why no other purveyor of fast-food has copied the idea?
Is Pizza Hut incapable of integrating its technology? Does Colonel Sanders not want the business? Actually Pizza Hut does take online sales, but if it were doing better than Domino's, surely it would be singing its own praises as loudly as Domino's does? KFC's online effort is minimal. Whatever secret recipe Domino's has for online pizza ordering, it's not sharing it with the other chains.
To be fair, most of the other high-street chains aren't delivering an online service but if there is a market there, perhaps it's time they did.
Otherwise, they risk being leapfrogged by the local chippie or kebab house. OK, these operations are perhaps not quite as preoccupied with their online presence as a multinational multiple, but technologically it's an easy proposition these days. Something for an enterprising aggregator to step into the breach and do it for them, for a little slice off the top?
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