The pizza industry is a colossal giant composed of big chains like Dominos, and local mom and pop joints all over America and the world. Each of the 77,727 pizza restaurants are focused on delivering delicious pies to pizza lovers. But not all pizza shops are created equal.
Even amidst a worldwide pandemic, people are not willing to give up on pizza. As the restaurant industry suffered from economic closures and social distancing protocols, the pizza industry barely skipped a beat, with traffic declining only 8%. Many other industries were not as lucky.
The pizza industry alone is worth $46.34 billion in the U.S. and $154.8 billion worldwide. Americans eat 3 billion pizzas per year, that’s 46 slices of pizza per person. Even with the uncertainty and instability of our current social and economic climate, the pizza industry is still going strong.
That’s why we took a deep dive into this very lucrative and tasty billion-dollar business to find out why it continues to be a huge success.
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The Sweeping Technological Transformation
With the rise of the internet, came the ability to buy and sell digitally. And one of the first things to be sold online was pizza, which goes to show how closely intertwined the pizza business and the digital era are.
Since the option for online ordering was first introduced in 1994 in Santa Cruz by PizzaNet, billions upon billions slices of pizza have been sold online. One might argue that the love of pizza, being one of the first e-commerce commodities, was the thing that helped kick off the e-comm boom.
The first pizza app was launched by Pizza Hut in 2009, and it became a huge sales driver for the chain. However, by 2020 Pizza Hut, the largest U.S. pizza franchise, filed for bankruptcy, and this turn of events only tells us about a small fragment of the whole story.
After the massive success of pizza apps and online delivery over the past decade, the market welcomed third-party delivery apps, a streamlined buying process, and almost every company was competing for a slice of the business.
The idea behind this digitalization was simple – make the process for the buyer as simple and as easy as possible. Provide the customer with an array of options so they can get the pizza they want when they’re craving it. Around this time, Domino’s CEO began describing the pizza company as a tech company, and since 2008, their stocks have risen 5,000 percent.
Today we have voice ordering, app ordering, pizza kits, custom options, discount codes, loyalty programs, automation, and soon delivery robots. Pizza is becoming less about pizza and more about tech innovation. .
Uber Eats, Doordash, Slice, Grubhub, these are all popular third-party apps that have gained massive popularity over the last few years due to their convenience and assortment.
Grubhub is an online food delivery empire worth around $4 billion. They recently merged with Just Eat in a $7.3 billion deal, which will allow Grubhub to reduce their fees and make them more competitive in the market
Slice, a locally-minded pizza app, is taking the industry by storm with it’s all-in-one platform that supports both customers and vendors. What helps Slice stand apart from the competition is that they not only connect pizza lovers to local, mom-and-pop style pizza, but they support local small businesses by giving them a robust marketing tech platform to reach a larger audience.
While pizza is a highly competitive market, Slice is cutting through the clutter by focusing on local pizzerias, who’s passion and dedication to the pizza craft make their product superior, and keep customers coming back for more. In light of their success, Slice was put on the Unicorn list last month, and awarded a $43 million investment from KKR in their C funding round. With their proprietary technology, it looks like Slice will be helping local shops give big-chain pizza a run for its money.
Uber Eats bought Postmates for $2.65 billion, and Doordash holds 35-percent of the market share in the U.S., which means it’s the biggest company in the arena.
If you add Domino’s, Papa John’s, Pizza Hut, and Little Caesars Pizza to the mix above, you’ll understand the landscape of the pizza industry. For example, in 2020, for the first time, Domino’s sold more pizzas than Pizza Hut.
Each of these companies is fighting for a bigger slice of the pie, whether we’re talking about sales or just delivery.
The only way they’re going to win is through quality and technology. The company that offers the best price/value ratio, combined with seamless customer experience, will win the day.
America is a high-volume driven market, which means speed is appreciated by the customer. With the growth of fast-casual pizza restaurants, people are getting more for their money. Moreover, the menus of these joints are expanding as well. You can now order pasta, chicken wings, and waffles with your pizza.
With the help of third-party apps, you can order your favorite pie from the place next door or the pizzeria on the other side of town.
Pizza in the Era of Digital Marketing
Pizza restaurants and third-party apps are not immune to trends. On the contrary, they’re often the ones setting them. So it’s only logical for these companies to go fully digital, especially when it comes to marketing. Digital ads boost sales, not TV commercials.
The targeted Pizza Hut ad campaigns are a mix of geographical and psychographic segmentation variables. In short, that means they are custom tailoring their offers according to the tastes of their customers when they’re targeting them with a particular ad. While Domino’s is sticking with their strong brand positioning as a way to differentiate, and the company is staying on message – fast delivery in less than 30 minutes.
Social media platforms and Google make it possible for these household names to widen their reach and grab the attention of customers through the screen, and that’s the natural transformation that came with online ordering, pizza apps, and third-party services.
The marketing is only reflecting the market.
Pizza is still an affordable meal that can feed the whole household, and it has been a cornerstone of American culture for the past 100 years. According to Marla Topliff, the chairman of the National Restaurant Association’s Pizzeria Council:
“There have been recessions, but pizza always seems to do well even during those times, because we’re the one food that families can depend on—that can feed a family for a fairly decent price, that helps celebrate football games and birthdays and kids’ parties. It’s always been the biggest percentage of the National Restaurant Association and the International Franchise Association.”
It remains to be seen how the pizza industry will fare through the coronavirus pandemic, but one thing is for sure, people will keep on eating it, and the industry will continue to find ways to innovate.
Violeta Bojkovska is a passionate content writer and avid content consumer. She’s a short story author, guest post blogger, and a firm believer in the startup “zebra culture.” She loves to write about food, travel, technology, and startups.