Web Site Unseen?

March 25, 2002

Not long ago, many in the pizza industry were skeptical about Web sites, if not outright disdainful.

No more. Even though the Internet stage is littered with dot-bombs, there's a growing proliferation of pizza dot-coms -- and a growing appreciation of their value.

"Yesterday was our fourth anniversary of being online," said Karen Sherman, vice president of community and public relations at Louisville, Ky.-based Papa John's International. "We're seeing a nice, steady stream of customers -- even though we really haven't done any heavy promotion."

Franchise giants such as Papa John's and Ann Arbor, Mich.-based Domino's Pizza offer Web sites with extensive information and services, including online ordering. Peter Piper Pizza, a smaller franchise operation based in Scottsdale, Ariz., likewise has a comprehensive Web site and plans to add online ordering.

Proof that a company's online presence is growing in importance is found in two recent studies. One by Dun & Bradstreet found that 85 percent of small business owners have 'Net access, more than half of those have a Web site, and of those firms online, 60 percent plan to use the Internet more in 2002. Additionally, a study done by Wirthlin Worldwide cites that 66 percent of American workers have access to the Internet in the workplace, compared to 44 percent in 2000.

Do they regard their Web sites as an important business component for the future? Indeed. But ask the same question of J.P. LaRussa, general manager of Zachary's Chicago Pizza, and you'll get a far different answer.

"Not particularly," said LaRussa, though the site has had 26,000 hits since launching.

Zachary's, based in Oakland, Calif., has two stores. There's no online ordering and no plans to add it. "We don't get any extra business and probably very few benefits," LaRussa said.

Nevertheless, the 18-year-old award-winning restaurant won't close its site because LaRussa believes an online presence, at the very least, increases visibility for little cost.

"It's practically free advertising," said LaRussa. "We've had a Web site for more than two years now and we did it all in-house. At the time it seemed like something to have.

"But do I think it's increased our business significantly? No."

Ironically, Papa John's took the same "what have we got to lose?" approach when it launched its site in 1997. There were no grandiose plans, no long-term strategy.

"We did it first as a test," Sherman said. "Our expectations at the time were just that we'd be reaching our customers through another means. We didn't have any lofty sales goals. In essence, it was something relatively easy for us to achieve and execute. And if it didn't work initially and didn't make sense for us, we could easily stop. But we realized fairly early that it was a valuable way to reach another niche of customers."

As a result, Papa John's has developed its online ordering system to the extent that nearly all of its 2,700 restaurants participate -- and have done so for almost two years.

"The only places where we don't offer online ordering are in non-traditional units, like stadiums and arenas," Sherman said.

Domino's likewise has had an Internet presence since 1997, but online ordering is available at a relatively small number of its 7,200-plus stores. The chain is experimenting with Web phone orders, which begin with customer profiles set up at their Web site. That initiative, which has been tested for nearly half a year in Las Vegas, has yet to be unveiled to the public.

Nevertheless, Brian Leipold, manager of interactive communications for the chain, said Domino's is sold on having a strong Internet presence.

"While it is difficult to measure the ROI from clicks to bricks, any successful extension of a global brand such as Domino's is going to have a positive impact on the business," he said. "We expect that the growth of the online community, coupled with the implementation of new technologies and applications, will continue to drive ROI."

Neither franchise was willing to disclose the costs involved in starting up their Web sites or maintaining them. Don Pijut, director of marketing for Peter Piper which has 150 stores, was more forthcoming.

"It cost us between $40,000 to $50,000 to launch," he said, "and it's about $200 a month to keep it up."

Kids comprise one of Peter Piper's prime market targets. On the Web site, a special section allows teachers to offer incentives for students (pizza "rewards" that can be purchased at a discount by the teachers). Like the other sites, it also lists its menu, locations, and corporate information.

"Is it increasing our business? We like to think so," Pijut said. "We know our customers use and appreciate it. We receive more than 2,000 hits a month."

Can You Take My Order?

Customers can't order online at Peter Piper's site, but Pijut insists that's part of its future -- "especially when we get the capability ... to schedule birthday parties online."

Zachary's, which was voted "Best Pizza" in a San Francisco Chronicle reader poll last year, is the only one of the four to do its Web site in-house. Papa John's and Domino's rely on both internal and external help, and Peter Piper contracts to have its Web site hosted and maintained by Intrasite, based in Phoenix. Papa John's uses online order-taking technology licensed by Food.com that is plugs into its existing store computer networks.

Web Maps Help!

Recent research done by Vicinity Corp., a manufacturer of Web locator devices and services, rated the effectiveness of online maps and locators. The study discovered that surfers who used Web maps and locators were not only more likely to visit the store or branch, but to make a purchase there as well.

Other findings included:
Eighty-six percent of survey respondents who requested map and driving directions reported actually going to the business location in question.
* Sixty percent of those who went to the business location made a purchase.
* Sixty-six percent of all map requests by respondents were for locations outside their current geographic area.
* Respondents who have lived in an area for six months or less are nearly twice as likely to use online locator services.

The study also found that people who use online map services to find store or business locations are highly educated, affluent, young, male, and:
* Fifty-five percent have at least a college degree; 25 percent attended graduate school
* Forty percent report household incomes above $75,000; half of those report incomes higher than $100,000
* Sixty percent are younger than 50, and 40 percent of those are between 35 and 50
* Seventy-five percent are male

Online ordering is gaining in popularity -- even if all the reasons why aren't certain.

"I kind of liken it to banks," Sherman said. "For the longest time people said that nobody would just solely use an ATM, that there'd be people who wanted to see a teller. And yes, there will be people who do that and people who must call Papa John's."

Sherman says no one is sure whether customers order online to save time or avoid talking on the phone. She suspects that busy signals they get when calling on Friday and Saturday nights may motivate some to let the computers to the talking.

"Online, it's on your own terms. You can order right then."

Online ordering is also helping at the operational end. An Internet order pops up on the store computer that's located at the make line. "And that's one less phone call that has to be taken," Sherman said. Still, few pizza companies have invested in the technology that allows that to happen, and rely instead on companies who receive the order and then send it to the pizza store's fax machine or e-mail account.

Service and Satisfaction

Web sites also allow customers to provide valuable feedback via e-mail.

"We receive a tremendous amount of feedback," said Domino's Leipold. "It ranges in topics from customer service to product to Web site satisfaction. All of that is very useful to us."

Sherman noted that Web site feedback also arrives more quickly and can be addressed in a timely fashion.

"It's a very efficient tool for us to get feedback quickly and act on it," she said. "If it goes through regular mail, it can get caught up in the system. Online, you can move it to who needs to see it quickly. We just didn't anticipate that this would be as efficient for feedback as it's proven to be."

At most sites, numerous tweaks and changes have been made. At Papa John's, for instance, what's now most prominent on the home page is a large slice of pizza that reads "ORDER PIZZA ONLINE." Click on it and you're whisked immediately into the ordering system.

"That change was based on customer feedback," Sherman said. "Used to be, when you got to our home page it was more like a newsletter or report online, (but) the bulk of them wanted to get to ordering."

Topics: Independent Operation

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