#RetailEXPOVC: How Pizza Hut regained its appetite for digital

Pizza Hut is widely known as the first company to sell a physical good online in 1994. That was via a pilot in California, which allowed customers to log onto its ‘PizzaNet’ portal and place an order on its Mosaic operating system. A form was sent to the company’s head office in Kansas, with the order redirected back to the local store via its servers. 

But despite initially being ahead of the curve “it can perhaps be said that they didn’t capitalise on their early adoption of eCommerce technology,” says Tristan Burns, analytics lead at Pizza Hut Digital Ventures speaking at the RetailEXPO virtual conference.

In the following years the creation of sites were done by individual franchises and sometimes individual stores. That left the brand without a consistent online presence and a suboptimal customer experience. “The legacy of this unfortunately prevails to this day in some smaller markets,” he says.

“The realisation that Pizza Hut had fallen behind technological advancements in the food delivery business truly hit home when the then CEO of Domino's, Patrick Doyle, began describing [it] as a tech company that sold pizzas. I think that really hit at the core of Pizza Hut hearing our number one competitor describe itself like that.”

That prompted the creation of Pizza Hut Digital Ventures – a separate business unit formed to design and build digital platforms working with franchises in different markets. The business opened in the UK two-and-a-half years ago and has offices around the world. Now most of its delivery orders in the UK are via the web and app form.

However, processing a high volume of low value transactions does not always equate to increased profit, notes Burns. “The challenge for us in optimisation, is to increase basket value without significantly impacting conversion.’

Better traffic on the site, improved load speed and reducing friction are key to improving online efficiency. The platforms also have a deal bot. So when items are added to the basket, it automatically looks for existing deals that apply and adds the discount. “If you look at the data, it improves order value and conversion.”


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New normal

Due to the pandemic, 100% of Pizza Hut’s sales are now via deliveries. This disproportionate spike, makes the current data difficult to use for long-term optimisation insights. However, Burns notes the situation won’t return to normal for for sometime. 

Ben Miller, insights director at IGD agrees that is particularly true for the restaurant sector. “We’re anticipating social distancing will remain the norm for the foreseeable future,” he says – speaking in the same session at the RetailEXPO virtual conference. “There is a lot of commentary about how the economics of social distancing in an eating environment is going to be really hard.”

“The businesses that survive are going to be the ones who are able to adopt and pivot their models. So that means, more takeaway, more food to go and more delivery." In the medium terms, those that can provide an experience and link to the community will be in the highest demand, he adds. 

For Burns the prospect of prolonged home working could have a positive impact on local businesses and restaurants. “It has shifted spend from the place where people work to where they live and work.. small businesses will come under pressure, but it can’t be ignored that there will also be a benefit to local areas.”

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