Domino's bolsters tech lead with new Innovation Garage

Dive Brief:

Domino's Pizza announced on Tuesday its new Domino's Innovation Garage, a new space near its Ann Arbor, Michigan, headquarters. The space will enable cross-functional teams to collaborate and test new ideas, according to a company release.
One-hundred and fifty employees will be tasked with focusing on technology innovations in the space, which features a fully-functioning pizza theater to develop and test innovations in a store setting.
Project-based teams will use the space to pilot technologies such as ordering kiosks, GPS delivery tracking, autonomous delivery vehicles and the company's AnyWare ordering technology.

Dive Insight:

Domino's is well ahead of its competitors when it comes to technology implementation. It's tested driverless cars and e-bikes, rolled out automated phone orders via artificial intelligence and is piloting GPS tracking, for starters. The company has proudly subscribed to the notion that it is a technology company that happens to sell pizza.

This approach had led to 29 consecutive quarters of positive comparable sales. For this reason, as well as consumers' swift adoption of convenience-enabling technologies, other restaurant chains have started taking a page from the Domino's playbook and may be catching up as a result. The company's most recent quarter generated weaker-than-expected sales, and CFO Jeffrey Lawrence has blamed strategic marketing by third-party delivery firms as an obstacle in the past. As most restaurants (66%) now offer delivery via third-party platforms, Domino's advantage for this specific convenience likely diminishes.

This new Innovation Garage could be the company's way of keeping a faster pace than its competition, however. In the release, Kelly Garcia, Domino's chief technology officer, said the company wants to have a workspace that "encourages experimentation and fosters an environment to take risks, test innovations and fail-fast so they can bring their best cutting-edge ideas to life."

Still, the idea of launching a technology innovation center isn't unique to Domino's. Chick-fil-A opened an innovation center last year on the Georgia Tech campus that's dedicated to developing technology solutions that benefit the chain. Wendy's opened its innovation center on Ohio State's campus all the way back in 2015, while KFC created its Digital Ventures Team 18 months ago in the U.K.

As competition intensifies over convenience-seeking consumers, restaurant chains are pulling out all the stops to enable easier experiences for them, and are backing it up with serious investments. According to the National Restaurant Association's 2019 State of the Industry, 70% of QSR operators plan to devote more resources this year to customer-facing, service-based technology like online ordering and mobile payments.

In other words, there are plenty of players out there with deep pockets willing to spend the money to catch up to Domino's after seeing its tech-first strategy pay off. The question then is whether or not a space dedicated to accelerating innovations will help Domino's maintain its edge.