Beyond the gimmick: The AI future of Domino’s
It’s hard to blame him, a subsequent question from the audience about whether its new innovations would grab more than just headlines was evidence of a wider perception that there may be more huff than puff in Meij’s arsenal.
But if the pizza retailer’s 23.9 per cent EBITDA growth last half wasn’t enough to convince sceptics, then its new “AI (artificial intelligence) first” focus just might be.
Starting this week, Domino’s has begun expanding its DRU (Domino’s Robotic Unit) platform with the addition of a voice-enabled, artificially intelligent assistant service that can take orders on mobile or desktop.
It’s called DRU Assist, and both Meij and his chief digital officer Michael Gillespie believe it represents a genuine platform change for the pizza retailer, as it looks to tackle an explosion in expected demand.
It’s not the first time Domino’s has sought the mantle of early adopter. After all, the business has championed delivery robots, flying drones and even reindeer in the last few years. But in many ways, the shift towards AI is the glue that sticks Meij’s grand plan together.
The internet of food
For Meij, Domino’s digital journey is taking place within the context of the so-called ‘internet of food’, which he believes will nearly double in size from $1.59 billion in 2016 to $2.56 billion annually by the end of 2019.
That’s a lot of pizza, and if Domino’s captures as many of those projected customers as Meij thinks it can, then the pressure will be placed on the number of people who can “humanly deliver” orders.
“Our retail environment has been internet barren,” Meij told IRW. “That’s about to change. You go to the supermarket right now and get 30 items on one occasion, but with the internet, you might get that broken down into 30 different deliveries.”
Suggesting there are already places in the world where delivery demand is outstripping fulfilment capacity, Meij has set Domino’s a three-year timeline to expand and integrate a mixed-service delivery model that merges traditional drivers of cars and scooters with automated drone systems.
This is where AI comes into focus. Aside from being customer facing, DRU is also being worked into Domino’s back-end processes to do everything from making dynamic decisions about whether to send a car or drone, to rostering and store fulfilment.
This part of the system is called DRU Manage, which has been designed to help franchisees and store managers cope with demand by taking many of the business’ responsibilities and automating them.
“Things that our managers and franchisees have had to do manually in the past will be taken away from them,” Gillespie said. “[The] store will have more time to devote to delivering faster and providing a better product to our customers.”
Domino’s AI first future is then about making automated processes work across the entirety of its business holistically, using data from customer facing processes to inform decisions about back-end operations.
Domino’s isn’t the only business to embrace AI, either. IRW reported last week that The Reject Shop is already investing in a demand forecasting platform and has since learnt that Mexican fast-food chain Guzman y Gomez is partnering with Google to ramp up its focus on virtual reality and artificial intelligence
“When people are ordering GYG, it will be voice recognition, location awareness, sensor beacons and artificial intelligence,” said Guzman y Gomez managing director Steven Marks.
Salesforce AI expert Dererk Laney is adamant that AI is heading in a holistic direction and says that they have “bet the entire company” on it as a strategy.
According to Laney, while AI has adopted a siloed approach in the past, newly developed platforms were taking what was a single service approach and expanding it across the business, using data from each process to inform the others.
“It’s everything from customer service on a chatbot to product recommendation and marketing automation, then on the backend, anything that’s data on the system can be applied as well,” Laney said.
“If you’re doing order management, inventory control, and recruitment – all of those things are imperative to retail success.
“Many customers aren’t even seeing AI, they are just noticing a better experience, seeing more relevant products and messages,” he continued.
Setting the standard
AI is fast becoming a competitive standard. Salesforce’s recent State of Service report found that 51 per cent of customers and three quarters of business buyers expect that by 2020, companies will be able to anticipate customer needs and make relevant suggestions before customers even reach out.
A further 69 per cent of consumers globally said that personalisation impacts their loyalty. But, as Anouche Newman, CEO of the Customer Service Institute of Australia, notes, the widespread adoption of AI to improve customer service still requires the provision of a seamless experience.
“Consumers want whatever they want fast. If it’s a customer service query, it’s about solving some kind of problem,” she said. “There’s efficiency with AI that, from a business perspective, enables you to start getting really cost effective with understanding and responding to customers.”
“You might have access to the same technology as everyone else, but how you use it and what you put into it will be important.”
Implementation is where Domino’s is looking to stand out. DRU Assist comes equipped with the ability to decipher more than 1.2 million pizza flavour combinations and delivery locations around the country.
While initial tests of the service were less than perfect, the company says that by March 20, the bot should have learnt enough to provide a seamless experience for customers.
Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.
Myer will close all stores at close of business Sunday and stand down approximately 10,000 staff without pay for an… https://t.co/5sHH9ESabA3 days ago
Hairdressers have slammed the Government for flip-flopping on store closures, saying 30-minute cuts still put them… https://t.co/NlRdHNpMmI4 days ago