What you need to know:

• Domino's is more than a decade into an an analytics – and increasingly AI – fuelled digital transformation that has sent its share price soaring from $7 in 2010 to $393 today.
• It achieved global market share leadership in 2018, but the dough's still rising, with online sales powering and delivery times sliced in the US during the pandemic.
• Since 2015 it has beefed up its analytics and AI (A&AI) team from 15 people to more than 60.
• Its data infrastructure is seriously deep dish: North of 13 petabytes of premium storage – bigger than the entire global internet archive in 2012.

Serious dough

Domino's Pizza Inc has ridden the digital transformation wave of the last decade to dominate the global pizza industry — a category now worth $141 billion according to Research and Markets. Today the company has about 20,000 stores in 90 different countries and delivers around 3 million pizzas a day. 

In Australia, its franchisee is Domino's Pizza Enterprises Limited, an ASX listed company that in addition to being the largest pizza chain in Australia is also the largest franchisee for the US Domino's Pizza brand in the world.

Playing the digital transformation long game has delivered. Domino's share price has risen from a low in 2010 of US$7.16 to north of US$390 today, translating into a market capitalisation of US$12.3 billion. (During the pandemic lockdown the price spiked to high of $553.23 on the final day of 2021 – happy new year shareholders.)

Domino's overtook Pizza Hut as the world's largest pizza delivery company in 2018. By 2021 it had gobbled-up 18.6 per cent global share, according to business intelligence developer Ahmed Amr, who wrote about the impact of analytics on the business on LinkedIn earlier this year. It also transformed the experience of buying pizzas – by 2021 online orders in the US accounted for 70 per cent of sales, and average delivery times fell below 30 minutes. 

Slicing, dicing

Smarter analytics also powered more personalised marketing campaigns and by 2020, the business noted in its annual report that same-store sales growth was increasing – and this in the context of growth in total store numbers.

"Ultimately [success] is tied to two store truck deliveries every day to each of those stores for fresh ingredients, and all of the necessities required to run a store. All of those pieces need to be crunched down, analysed, and understood by people who make decisions to keep the business going forward, and growing market share," according to Bill Heilman Jnr, Technical Delivery Manager, Domino's Pizza.

That growth and success is built on a platform of investment in analytics and AI capabilities that began with a modest investment in business analytics prior to 2010. It has subsequently grown into a data science team of 60 in North America, and now increasingly deploys artificial intelligence to help steer all aspects of the business, from supply chain management to site location, sales and marketing, and home delivery.

"Business intelligence was a great first start – we were getting a lot of insights out of just the general batch reporting around end-of-day sales," Heilman told the Pure Storage conference in Las Vegas.

But then the idea of having machines comb through the data and more rapidly tie insights together started to emerge.

"By 2015, we started putting together this analytics and insights [team], which started with basic tools, … to be able to analyse this stuff quicker, faster and have more flexibility,” per Heilman.

But then it started to get serious – which required a massive investment in data infrastructure. Domino's now has 13.5 petabytes of premium storage —by way of comparison some estimates put the entire archive of the global internet in 2012 at just 10 petabytes.

Bots tuck-in

“You can have rooms of people to work through all these problems, but if you understand what you're looking for, you can have the computers come up with those decisions quicker. And then you can then ask the more complex questions in terms of what's next,” said Heilman.

“We know how many pizzas we sell, we know when we sell them, we know how much we're selling them for.  We understand what the food costs, we have a complete understanding of the products. But once you become the world's number one pizza company how do you continue to gain more market share? That's what propelled this team from 15 data scientists in 2015 to over 60 today.”

Heilman's team is effectively mirroring what Domino's does in the real world: highly efficient logistics, but with data.

"Our job is to make sure that the data is where it needs to be on time, every time. The models that they're training, the models that they're using, the deep learning cycles that they're using to analyse all of this [needs to be] there consistently without failures and as fast as possible."

The challenges faced by Domino's analytics and AI team span inventory management, food costs, supply chain management, and labour costs.

By using machine learning the AI and analytics team is also able to interrogate market trends beyond workaday operational issues.

For instance, Domino's tracks the start of food cycles. "To get milk from a cow you have to feed it. You have to keep an eye on what the cattle are consuming to make the meat or make the cheese. So they're looking at things very early on, before it gets to the finished product, so we can keep tabs on what we're using, how we're using it and how much we need."

"That translates into the supply chain centre management, because all the food we are ordering comes through our supply chain centres domestically. Keeping food in the stores in the proper quantity and the correct freshness window is really important to the customer experience at Domino's. We make sure the pizza that you order in Brooklyn tastes the same as it does in Ontario, Canada. All of that goes into the system and comes out as finished analysis."

Franchisee feed

Domino's also provides its store owners with real-time telemetry about how the business is performing. "There are streaming analytics to give franchisees a dashboard of the pizza store going back five years, comparing today to the year prior."

Super Bowl Sunday, he said, underlines how that telemetry intelligence enables smarter decision making by store owners.

"That's a big day for us. We want to make sure that the store owners know how many drivers [they need] based on last year's demand. We’re helping them to understand what they need in the refrigerator, how many people they need making pizzas versus delivering pizzas, versus taking orders. All of that is done through our A and AI business intelligence teams."

Telemetry is also available to customers in the Domino's app. And they use it. Knowing when the pizza is coming is serious business. “Domino’s is very concentrated on customer experience," per Heilman. "All of that telemetry that you're getting in the app is coming from real-time telemetry in-store."

Delivering more

These days, 74 per cent of Americans live within the delivery radius of a Domino's Pizza store. But there's always a pocket that could be better served, if you know where to look. Domino's knows where to look, with analytics and AI highlighting the best build options.

"All of our stores have what we call a delivery radius. The franchisees very rarely will extend themselves outside of that radius,” said Heilman.

"We take a lot of geographic data, we take a lot of data about the population and we make sure that we have enough stores within enough of the population to drive market share value and the continuous customer experience."

Get it right, and Domino's will eat an even bigger slice of the pizza pie.