When it comes to Western fast food, everyone usually thinks of burgers, sandwiches and pizza. However, when you are in a real hurry to solve a meal, you probably won't take pizza as your first choice. Because as a fast food, pizza has a natural disadvantage of being slow to come out. Once it gets cold, it's not good. Delta Pizza (NYSE: DPZ) is here to change that.
What does the world's second largest pizza chain, look like?
Damela's stock price performance since its IPO
Thirty-eight percent of Damela's 13,000-plus stores are currently located in the U.S., and those stores contribute 87 percent of total revenue. Stores outside the U.S. are franchised, and these franchises contribute 23% of the company's total gross profit.
Damela's has now expanded into 85 markets worldwide, with 67 percent of its stores in the top 10 markets. It's safe to say that in most global markets outside the U.S., Delta has yet to really make a dent.
Comparing the other two giants of the pizza industry, Pizza Hut and Bang John, Yum Brands, which went public in 1997 with four restaurant brands -- KFC, Pizza Hut, Taco Bell and Long John Silver's (LJS) -- has risen just five times since the same period. And Rod & John, which also focuses on pizza, is even more up-to-date, with a current total market capitalization of $2.950 billion, a lighter volume than Delta ($9 billion), which is up 10 times over the same period.
Yum Brands (NYSE:YUM)
Bar John (NASDAQ:PZZA)
How the pizza legend was made at 25 times in 13 years.
Before the financial crisis, Delta's stock was mediocre. After weathering the financial crisis, Delta's stock has continued to rise. In the past year, Delta's same-store sales in the U.S. grew 10.5 percent, global same-store sales grew 6.3 percent, operating income rose 11.6 percent and net income rose 11.4 percent. Delta's miracle can be attributed to the following:
Clear positioning: focusing on fast-food pizza service
Deli's online ordering, mobile ordering, and 30-minute delivery services all emphasize that Delta is a "fast" restaurant to its customers. The company's online ordering, mobile ordering, and delivery within minutes all emphasize to customers that it is a "fast" restaurant. When you are hungry and in a hurry, you can place an order online and pick it up at the store in 15 minutes, or wait for it to be delivered to your door within 30 minutes. Because of the rapid growth of takeout in China, we may not realize that this is a big selling point. But Delta, which started its online ordering service in 2007, has been more forward-thinking than a host of rivals.
To be able to deliver in 30 minutes, Delta chooses the location of each store very carefully. With more than 5,000 stores across the U.S., the company is able to deliver quickly by precisely covering every neighborhood. At the same time, Delta's stores have a large proportion of kitchens, and the dining area removes a large number of tables and chairs, with no comfortable sofa seating, and only a small number of areas for customers to wait for their meals and eat quickly. As a result, Delta spends far less on individual stores than its peers.Delta's operating margins amounted to 18.36 percent in 2016, compared with 9.6 percent at Bang John during the same period.
Such a stark trade-off stems from Delta's clear positioning of itself, focusing on fast-casual service.
Improving tastes and personalizing meals
Whether it's good or not is a question that varies from person to person.
In 2009, a survey showed that Delta's pizza was at the bottom of the list of flavors, and the chief marketing officer publicly declared that his pizza was awful. After that, Delta began to improve the taste of its pizzas. In addition to changing the recipe, one of the things that has captured the hearts of young people is personalization. Nowadays, we even pay attention to personalization when we buy a drink, for example, we see a lot of recommendations of personalized orders for a little bit of milk tea on the Internet. Delta's pizza gives you a variety of choices starting with the crust.
You pick up your phone and you can DIY every pizza, choosing one of seven crusts and adding more sauce and less onion and some tuna? With all the combinations, you can achieve a myriad of new flavors, and if you have to eat fast food often, you'll always want something different today.
Marketing for eyeballs: playing with black technology
If precise positioning and good taste can only create a "not bad" company, marketing makes it even better.
Damela's black tech started with mobile ordering, then introduced drone delivery, robot delivery, ordering through smart wearables, emoji emojis, and scanning stomachs to determine taste. Just press the pizza button to order food at the touch of a button ...... All of these ideas, which look like a brainchild, are tightly focused on the positioning of Delta.
Can Delta's black tech be ahead of other tech companies? Not necessarily. But in the restaurant industry, or the fast-food industry, Delta's digital transformation leads the pack. From mobile ordering in 2007, you can now place orders on almost every platform: social networks Twitter, Facebook, smart watches Apple Watch, smart devices Amazon Echo, Google Home, WeChat ...... In terms of payment methods. Delta supports Google e-wallet and is one of the first companies to support Apple Pay.
Can the development of these technologies bring real benefits to Delta? Not necessarily. But what's certain is that these marketing tactics are earning eyeballs. Especially for young people who enjoy fast food, Delta's image has become cool.
One-touch ordering button
In the end, China is a big challenge
Damela's advantage is that more than half of its orders are made digitally, which allows it to analyze users' tastes and preferences by way of big data, and to make more favorable decisions in future market development. Where otaku culture is prevalent, such as Japan and South Korea, Delta has already made a push and is doing very well.
In China, Delta's stores are currently limited to Beijing, Shanghai and Hangzhou, and do not cover all popular shopping areas. These three cities, as well as other first- and second-tier cities in China, are already very developed in the takeout business, making it difficult for Delta's strengths to be fully realized.