Papa John's and Domino's battle is out on the web
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Papa John's and Domino's compete on numerous fronts, but each company is pouring resources into web channels in order to draw in more customers.
The web has become a key battleground for quick-service restaurants (QSR), particularly pizza chains, as the average pizza order is 18% greater online than on the phone. So Domino's and Papa John's have been competing in this area for the past few years to get customers to order through the web.
On top of the order value, the data collected from online order forms is of utmost importance to the pizza chains, another reason QSRs want to push customers to use their websites and mobile apps.
Domino's website averaged 9.7 million U.S. adult visitors each month across desktop and mobile in 2015, while Papa John's site accumulated 9 million per month, according to data from comScore. And web traffic for both sites has been steadily growing in the last few years.
Domino's has beaten Papa John's in total sales, with $8 billion in 2014 for the former and $3 billion for the latter. And as more people order food online, Papa John's will need to contend with more competitors and must therefore use its large web presence to stay ahead.
Mobile order-ahead is still in its early days, but will be a $38 billion industry by 2020, accounting for 10.7% of total QSR industry sales. This will be driven by full adoption among the top QSRs in the US, the growth of mobile commerce, QSR adoption through aggregators like Grubhub, loyalty programs, higher average order values, and new buy buttons.
Evan Bakker, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed Mobile Order-Ahead Report that profiles the companies that have proved the mobile order-ahead concept and analyzes the trends contributing to this new industry's growth.
Papa John's and Domino's battle is out on the web
Here are some key takeaways from the report:
Mobile order-ahead apps — platforms that enable consumers to remotely purchase menu items for in-store restaurant pickup — are on the rise among quick-service restaurants (QSRs). We expect sales on these platforms to reach $38 billion by 2020, representing a five-year compound annual growth rate (CAGR) of 57%.
Mobile order-ahead will ultimately have an additive effect on the QSR industry. Mobile ordering platforms have been proven to intensify customer loyalty, increase purchase frequency, and lift average ticket sizes through order customization and easier checkout options. This means that mobile ordering is not a simple substitution for in-store purchasing, but a channel that can enhance the lifetime value of QSR customers. This makes mobile order-ahead a critical channel contributing to the growth of the QSR industry.
Alternative commerce solutions will help propel mobile ordering. Aggregators like Grubhub will onboard smaller fast-casual restaurants into the mobile ecosystem by offering them an existing app to integrate into, lowering the upfront costs of creating a mobile channel of their own. And in-store self-service kiosks will help popularize remote ordering and accustom users to less traditional forms of payment that don't require a cash register.
In full, the report:
Forecasts the growth of the mobile order-ahead industry in the US from 2015 to 2020, including its share of total QSR sales.
Profiles brands that are leading the migration to mobile ordering.
Examines the alternative commerce solutions that could help popularize mobile order-ahead.
Explains the risks and drawbacks to launching a mobile commerce platform.
Assesses the ways both large and small brands can create a mobile order-ahead platform.
Determines which types of fast-casual chains are in the best position to benefit from mobile order-ahead.
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