Inside Domino’s Quest to Revive Sales With ‘Emergency Pizza’
Domino’s Pizza needed a hit.
Sales at the biggest U.S. pizza chain had lost their pandemic-driven momentum, and a string of weak quarters sent Domino’s shares lower. The company’s marketers debated a range of strategies, including offering a free pizza to every American, an idea the finance team nixed.
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What eventually emerged was “Emergency Pizza,” a deal that rewarded members of the company’s loyalty program a one-time free pizza to claim within 30 days after making a single purchase.
That was just the idea. Over roughly two years of internal analysis, teams studied the promotion’s costs and profitability, feedback from franchisees and how customers might try to game the system.
Emergency Pizza, which launched in October 2023 and ran until last February, powered a surge in orders and brought millions of new members to the Domino’s loyalty program, according to the company and franchisees. The deal was one of the biggest giveaways in Domino’s 63-year history and cost millions of dollars.
“I lost some sleep,” said Kate Trumbull, the Domino’s executive who spearheaded the promotion.
Two million people joined the chain’s loyalty program as a result of the deal, representing about two-thirds of all new enrollees last year. Franchisees profited both when the promotion ran and in subsequent months as the new loyalty recruits continued to spend, Domino’s said.
The promotion reflects the extensive planning that goes into developing restaurant deals. It also shows how much chains need them to win over consumers who have pulled back on restaurant visits.
Restaurants have steadily increased menu prices, moves that executives said were needed to cover rising employee wages and food costs. And while chains generally haven’t lowered prices, they are offering more short-term deals and investing more to advertise them.
McDonald’s in June launched a $5 meal bundle, and this month extended it through much of December. At least a dozen chains, from Sonic to Shake Shack, have released their own promotions such as discounted meals or buy-one-get-one-free offers.
Breaking the glass
It was fall 2021 when Trumbull, chief brand officer for Domino’s, and her team began strategizing a promotion that could position the company as a solution to life’s downers, like burning dinner or the power going out. Domino’s wanted to add new members to its loyalty program, as well as encourage current members to increase their order frequency.
The Emergency Pizza concept emerged from those talks. On the Domino’s app or website, after a user placed an order, a message declaring “break glass in case of pizza emergency” would pop up. A user would be prompted to sign into or join its loyalty program to get a free pizza. Doing so would result in a digital coupon for a free medium two-topping pizza in the loyalty account.
As Domino’s tested the deal with focus groups for roughly a year, the company’s finance executives had basic questions: Could the deal make money? And would it help bring back infrequent customers? With potentially hundreds of thousands of free pizzas being offered, they recommended reserving it for carryout customers, a part of the business the chain had been working to expand.
The company’s technology group was charged with analyzing the potential for fraud. Online bots can create fake accounts to scoop up such rewards, and some consumers have circulated their promotion codes on social media for others to use.
By April 2023, Trumbull felt comfortable enough to start pitching the promotion to some of the chain’s more than 700 U.S. operators. In a meeting that summer at the chain’s ad agency in Manhattan, longtime Domino’s franchisee Art Hurteau praised the concept but recommended that it also benefit delivery customers.
“Quite frankly our delivery business is not as strong as pre-Covid,” said Hurteau, referring to his thinking at the time. The Springfield, Mo.-based operator, who owns 38 stores and got his start delivering pizza for Domino’s in 1977, remembered a time when all his business was delivery.
Trumbull ran simulations that showed the deal could include delivery and still produce profits. After franchise committees signed off, Domino’s started printing up T-shirts and boxes for restaurant workers. Tech teams readied the app and Domino’s ensured its supply centers had extra dough balls on hand.
Building pizza loyalty
After nearly two years of discussions, Domino’s last October hit the switch on Emergency Pizza. Consumer demand swelled, and franchisees watched their sales build for weeks.
At Hurteau’s Missouri and Arkansas stores, some customers were confused about how to cash in their digital freebie. Hurteau said he often just handed them a free pie.
Around Halloween 2023, orders came in so swiftly that some franchisees feared something had gone haywire. Texts from operators flooded Trumbull’s phone, and the Domino’s tech team started investigating.
Scammers had found a loophole in another promotion that Domino’s ran concurrently, which awarded free pizzas to customers with student loans. A glitch allowed individual codes to be redeemed multiple times, and some users shared them online, driving a rush of orders to unprepared stores.
The chain’s tech team closed the loophole and built more safeguards into the coupons, but Hurteau said he ended up giving away around 150 ill-gotten pizzas.
Despite the glitch, Domino’s executives said that Emergency Pizza helped reverse its U.S. sales slump. U.S. same-store sales rose 2.8% in the three months ended Dec. 31, outpacing many pizza rivals and luring back lapsed customers, Domino’s said.
Trumbull said one of her biggest surprises was that many customers never claimed their free pizza.
“Brands in the world are shouting at people all the time,” she said. “It just reminds you that people are incredibly busy.”
Domino’s plans on reintroducing Emergency Pizza in early October, with an early online promotion showing a video imitating breaking glass.
Write to Heather Haddon at heather.haddon@wsj.com