A taste for digital
The rise of digital communication means the time is ripe for franchises to reap the rewards of an online presence. Take pizza empire Domino’s as a prime example of an online success story. Endless technological advances are having a significant impact on Australian retailers. While bricks and mortar retail stores offer shoppers the opportunity to see, touch and try retail goods before purchase, online shopping websites and apps are providing consumers with added convenience and a more personalised shopping experience.
Dramatic increase in sales
For those businesses that have shifted their operations into the technological space, the move is paying off with the increase in customer satisfaction and loyalty often resulting in a dramatic increase in sales. One such business that is reaping the rewards of joining the digital age is pizza empire Domino’s. More than 50 per cent of the global fast food franchise’s sales are now sourced from the internet and smartphone and tablet apps.
Commitment to investing
“We expect online sales will represent 80 per cent of all orders by 2016 and our digital team is developing technologies to facilitate this.” “Domino’s takes digital development seriously, so much so that we see ourselves as primarily an online company that sells pizza,” says Domino’s CEO Don Meij (pictured).“Embracing technology is one of [our] core strategies as it increases productivity, has a positive influence over sales and ultimately puts Domino’s ahead of our competition. “Our commitment to investing in technology solutions and the entire customer online experience has seen Domino’s exceed sales expectations and we plan to continue to make advancements in this area and will aim to set a high standard for other businesses globally,” he says.
Domino’s first introduced online ordering in 2006. Back then digital sales accounted for less than one per cent of all orders. Despite the initial response, Meij says the company persisted because it believed that this was an area that would eventually grow at a rapid rate. “Our determination to be market leaders in digital innovation has seen Domino’s grow from only one per cent of online orders in 2006 to over 50 per cent today, half of which are from mobile phones,” he says.
Digital trend to surge
Furthermore, Meij expects this digital trend to surge over the next three years.“We expect online sales will represent 80 per cent of all orders by 2016 and our digital team is developing technologies to facilitate this growth,” he says. “Our online digital team has increased by 500 per cent over the past four years and is continuing to grow exponentially.
It really has changed the way we do business. It has changed the strategic direction of the business and the focus areas of growth have significantly changed with it.” Meij also says the move to online trading has given franchisees more freedom to reach their clients.” It really has given them more ways to communicate with their customer base.
They can customise their offering because they understand what specials and deals customers respond well to and it’s also provided them with a unique advantage in the market over competitors,” he says. “The focus on digital has also reduced the number of phone calls and customer walk-ins, which has allowed franchisees to concentrate on improving product, service and image.”
The ideal online presence
Retail is moving in a direction that requires businesses to have a well managed online presence, according to Michael Schaper, Deputy Chairman of the Australian Competition and Consumer Commission (ACCC ). “It’s clear that online issues are becoming more important and in a variety of different ways,” he says.
“The increase in online trading means that consumers are buying from a wider variety of places and they’re keen to make sure they know what their rights are. Many of them want to know [whether] they still apply in cyberspace in the same way that they do in a bricks and mortar store and the short answer is yes.”
In its recent submission to the federal government’s review of the franchising code of conduct, the ACCC recommended that more attention be paid to online matters. “Many franchise models were built in the day where there wasn’t really a substantial online presence,” Schaper says. “For a franchisee, because you’re governed by the contract that you have with your franchisor, the very first thing you need to do is get it clear in your head and the franchisor’s head exactly where you stand in terms of adapting digital technology into the business. It’s crucial that you read your franchise agreement and see what’s in there.
“Some agreements prohibit online selling or say you’ve got to get the franchisor’s permission before you sell online. A franchisee should also note that some agreements ban the use of the franchisor’s property such as their logo or trademarks without the franchisor’s consent, so you have to be careful that you aren’t breaching the contract if you advertise online or set up a Facebook page without clearing that with your franchisor first,” he says.
Written by: Sasha Westwood