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How Domino's Stays on Top of Customer Demand

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How Domino's Stays on Top of Customer Demand How Domino’s Stays On Top Of Customer Demand FEATURE STORY (p . 7) JANUARY 2020 News and Trends The unexpected popular 11 food orders from 2019 Deep Dive Why coupon fraud is particularly challenging 15 for QSRs Scorecard The latest mobile order- 22 ahead provider rankings MOBILEORDER-AHEAD Tracker TABLE OF CONTENTS What's Inside 3 A look at recent mobile order-ahead developments, including the slow but steady implementation of digital food services and the fraud fears impacting consumers and restaurants Feature Story 7 An interview with Christopher Thomas-Moore, Domino’s vice president of global eCommerce and digital marketing, on how customer feedback drives the chain’s feature developments News and Trends 11 The latest headlines from around the space, including a new restaurant devoted to airplane food and the orders topping Grubhub's Year in Food 2019 list Deep Dive An in-depth examination of how QSRs can fight coupon fraud, including why digital 15 discounts may not be enough to stop the problem Scoring Methodology 19 Who’s on top and how they got there Top 10 Providers and Scorecard 21 The results are in. See the top scorers and a provider directory featuring 77 players in the space. About 52 Information on PYMNTS.com and Kount ACKNOWLEDGMENT The Mobile Order-Ahead Tracker® is powered by Kount, and PYMNTS is grateful for the company’s support and insight. PYMNTS.com retains full editorial control over the following findings, methodology and data analysis. © 2020 PYMNTS.com All Rights Reserved 2 WHAT'S INSIDE Mobile devices are used for more restaurant func- Consumers may be reluctant to take advantage tions than ever, but most American consumers are of these capabilities for any number of reasons, still not fully leveraging them. Only 42 percent use but fraud threats are most pressing. A recent their devices to look for coupons and deals, 38 per- study found that more than 62 percent of restau- cent to peruse menu items and 37 percent to search rant patrons worry about fraud when using mobile for nearby locations, according to recent research. order-ahead apps, approximately 49 percent fear Placing and paying for orders only accounted for that their credit card data will be stolen and 41 32 percent and 28 percent of smartphone-related percent are concerned about account takeovers restaurant interactions, respectively, but approx- (ATOs). This data should trouble restaurants as imately one-third of respondents said they use many consumers would abandon establishments mobile ordering more often now than they did two with fraud-prone apps. years ago. © 2020 PYMNTS.com All Rights Reserved 3 WHAT'S INSIDE This consideration rests atop the myriad fraud These evolving food preferences are leading some risks that quick-service restaurants (QSRs) face ev- unexpected players to dip their toes into digital or- ery day. One of the most irritating issues is coupon dering. Once such entrant is commercial airline fraud, which costs United States-based business- AirAsia, which recently launched a restaurant and es between $300 million and $600 million each cafe at the Mid Valley Megamall in Kuala Lumpur, year and sees bad actors photocopying coupons or Malaysia. The eatery serves up the airline’s signa- manually altering bar codes. Mobile order-ahead’s ture dishes, including Pak Nasser’s Nasi Lemak and growing popularity means QSRs should shift to saf- Uncle Chin’s Chicken Rice, with mobile ordering er digital technologies, but this will not make them support. AirAsia plans to develop an in-house deliv- immune to attack. ery app in the near future. New tools may curb some customer-facing fraud Fraud continues to threaten QSRs and mobile or- types, but they might also alienate customers. Such dering developers, and many are teaming up to inconveniences could be enough to slow down mo- protect themselves and their customers. One such bile order-ahead’s growth. partnership comes from food delivery company Easi and payments platform Adyen, with the former Digital fraud developments around the world planning to integrate the latter’s RevenueProtect Mobile ordering preferences are changing as cer- platform into its operations. The platform leverages tain offerings become more popular. One of the machine learning (ML) capabilities to identify card most surprising trends of 2019 came to light in testing and card-not-present (CNP) fraud efforts, as Grubhub’s annual Year in Food report, which re- well as algorithmic matching, behavioral analytics vealed that cauliflower crust pizza experienced a and device fingerprinting to prevent false positives. boom among consumers, rising a staggering 650 For more on these stories and other mobile percent in popularity since 2018. Other vegetarian order-ahead developments, read the Tracker’s and health-conscious foods accounted for seven of News and Trends section (p. 11). the 10 orders on the Top Orders Of The Year list, with spicy Brussels sprouts and portobello empanadas taking second and third place, respectively. © 2020 PYMNTS.com All Rights Reserved 4 WHAT'S INSIDE How Domino’s customers drove the chain’s Executive mobile innovations New mobile order-ahead apps owe much of their INSIGHT inspiration to those that came before, and chains How can analyzing customer spending habits such as Domino’s, Dunkin’ and Starbucks led the help find irregularities that could be indicative of fraud? way in developing services like order trackers, store locators and voice assistants. Such innovations did “Customer spending habits can reveal important busi- ness or product information. Fraud prevention solutions not come out of thin air, and instead reflect cus- that provide features such as user defined fields are po- tomer demand and competitors’ moves. For this sitioned to help businesses [analyze] the information month’s Feature Story (p. 7), PYMNTS spoke with they feel [is] important. Kount’s [user defined fields] provide businesses with customizable, flexible fields to Christopher Thomas-Moore, Domino’s vice pres- capture information that is specific to their products, ident of global eCommerce and digital marketing, customers or goals. … Examples include loyalty infor- about the origins of the chain’s digital ordering sys- mation, coupon codes, [purchase dates and times], tem and how both customers and competitors store IDs, and more. [User defined fields effectively re- duce] manual reviews, [deliver] purchase and customer inspired its innovations. information and can reduce chargebacks. Deep Dive: QSRs struggle with coupon fraud Businesses can use this level of control to determine important growth factors and then collect the data they Phishing, data breaches and ATOs may dominate need in order to make informed accept [or] decline deci- mobile ordering fraud headlines, but schemes that sions. [They can also] use the data to run analytics [and make] better business decisions. This data can be used have been around for decades also plague QSRs. to analyze transactions in order to reduce chargebacks One such variety is coupon fraud, which sees and automate decisions for known, good customers. fraudsters illicitly modifying, altering or duplicat- For example, one of Kount’s high-volume custom- ing coupons to score free or discounted food. This ers uses [user defined fields] to capture detailed, month’s Deep Dive (p. 15) explores the threat cou- product-related information [and] analyze the fraud pon fraud poses to QSRs and why a shift to digital rates for new products versus established products. This helps them to monitor new products as they are discounts may only provide temporary relief. introduced and catch any fraudulent activity quickly. The result? Businesses gain data essential for un- derstanding how they can capitalize on successful products and continue to market to their good customers.” RICH STUPPY chief customer experience officer at Kount © 2020 PYMNTS.com All Rights Reserved 5 WHAT'S INSIDE Five Fast Facts 18% 34% Portion of restaurant Share of Americans who apps that offered mobile prefer ordering takeout or order-ahead as of April 2019 delivery to eating on premises 650% 79% 49% Increase in the popularity of Year-over -year increase in Share of consumers who cauliflower crust pizza orders food and beverage industry fear that using mobile on Grubhub from 2018 to 2019 fraud attacks reported in 2018 ordering apps will lead to payments fraud © 2019 PYMNTS.com All Rights Reserved 6 How Domino’s Stays On Top Of Customer Demand © 2020 PYMNTS.com All Rights Reserved 7 FEATURE STORY Mobile order-ahead has become ubiquitous to can now order Domino’s via Amazon’s Alexa, Goo- QSRs and nearly every chain now has an app pres- gle Home, smartwatches and a host of other ence, making it is easy to forget that the technology products and services. Even social networks like was rare just 10 years ago. Domino’s was one of Twitter now feature Domino’s ordering capabilities, the first chains to innovate in the space with the de- allowing hungry users to simply tweet a pizza emo- velopment of an online tracker that reported order ji to reorder food and pay with saved transaction statuses to customers in real time and an artificial information. intelligence (AI)-driven voice ordering platform. For- “That’s the one I actually hear most about when mer CEO Patrick Doyle even famously claimed that I’m traveling and talking to people about what I do,” Domino's was a technology company that hap- Thomas-Moore noted. pened to sell pizzas. Domino’s was also one of the first players in This emphasis on mobile order-ahead did not come voice-activated mobile ordering. Its AI-enabled out of nowhere, according to Domino’s vice pres- chatbot, Dom, launched as voice-activated app in ident of global eCommerce and digital marketing, 2014, enabling customers to place orders just like Christopher Thomas-Moore.
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