Papa John's stokes pizza's digital war

Nov. 6, 2013 | by Alicia Kelso
Papa John's stokes pizza's digital war

Companies always try to jockey for points when releasing news, using subjective phrases such as "the best" or "the fastest." That's why the digital channel growth in the pizza space is particularly intriguing, as the three biggest players all claim to have the most ideal position.

For example, Pizza Hut claims to have launched the first mobile app in 2009. The company just added enhanced features for its Android, iPhone and tablet platforms, and also has an Xbox ordering capability. The chain said 30 percent of all orders come from digital channels.

Domino's just released its Profiles feature, meant to speed up the digital ordering process. Domino's also offers an Android app, iPhone app, iPhone 8 app and a Windows Phone 8 app. The chain said 40 percent of sales now come from digital orders.

Now, Papa John's, which just released its Q3 results, claims that more than 45 percent of orders come from ecommerce.

"Just last week, we topped $5 billion in all-time, systemwide digital sales. As a result of ecommerce, our business continues to be a leader," said Tony Thompson, president and COO, who added that 45 percent is the highest in the pizza category.

The company's executives attributed the company's Q3 results — including 1.8 percent North American comp sales growth — in part to its digital ordering and marketing efforts. The quarterly results were strong enough to push the company's stock prices to an all-time high.

"(Founder/CEO) John (Schnatter) has always had keen insight into consumer trends, with an unrelenting focus on giving consumers what they want. As a visionary, John recognized early on that consumers' ordering habits were going to change with the rapid growth of Internet," Thompson said.

As a result, in 2001, Papa John's began offering online ordering for all U.S. restaurants, and added SMS text marketing in 2007. In 2010, Papa John's launched its Papa Rewards digital loyalty program.

"With the significant and ever-growing number of Rewards members, we have an ability to connect in a more individualized manner and to better relate with our customers," Thompson said.

Executives noted that digital ordering drives top line sales due to increased guest frequency and ticket.


Digital growth wasn't the only story behind Papa John's Q3's results. International continued to grow at a fast pace, with 8.1 percent comp sales and 44 net new openings globally on the quarter. The company has more than 1,200 openings scheduled within the next six years.

"Driving those (sales) in part, our international product and service scores continue to reach all-time highs. Our franchise base is strong, and consistent operations have helped increase demand around the world," Schnatter said. "We opened our 1,000th international location during the second quarter. Very few brands in any industry have opened 1,000 locations internationally. We view this as a springboard to even greater international growth."

Schnatter added that corporate-owned stores are having their best year ever, despite the "most rugged commodities market in the history of the company."

Read more about operations management.

Topics: Loyalty Programs, Marketing / Branding / Promotion, Online / Mobile / Social, Online Ordering, Operations Management, Papa John's

Alicia Kelso
Alicia has been a professional journalist for 15 years. Her work with, and has been featured in publications around the world, including NPR, Good Morning America, Voice of Russia radio, and Franchise Asia magazine. View Alicia Kelso's profile on LinkedIn

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