Pizza Hut’s decline in innovation
Pizza Hut needs to catch up to its competitors in terms of innovation. Specifically, the pizza chain has been lagging behind Domino’s, a tech giant, for years. Domino’s brand, for example, has perfected driverless delivery vehicles and a pizza tracking app. In comparison, Pizza Hut has lagged in many ways, according to Cathy Novelli, vice president of marketing at Rakuten Ready, which works with restaurants and other retailers to develop new technologies and innovations.
Although Pizza Hut was among the first chains to offer online ordering, the company tended to be hesitant to implement new technologies and services. In 1998, it was the only Yum Brands chain that still needed to adopt third-party delivery apps. That changed in 2018 when the pizza giant partnered with GrubHub. Despite the millennial customer base, Pizza Hut has been reluctant to use third-party delivery services.
In 1994, Pizza Hut saw a decline in profits. The company’s pizza market share had stopped increasing, and competition had lowered prices. Also, the company’s number of stores had increased, which meant fewer resources were allocated to innovation. Meanwhile, consumers began opting for delivery over dine-in. As a result, Pizza Hut shifted its focus from dine-in to delivery and carryout. This led to the closing of some locations and the creation of Express locations.
Pizza Hut’s decline in innovation can be traced to the company’s ill-fated rebranding. This decision was made because the company needed to follow consumer trends and lacked innovation. Since then, the company has shifted its focus from creation to technology. While Pizza Hut continues to make delicious food, the company’s focus on innovation has begun to wane.
In addition to declining sales, Pizza Hut is also losing its position as the largest pizza chain in the United States. However, this decline in sales is only partially due to competition from dine-in chains, such as Dominoes and Papa John’s. Both chains are experiencing declining innovation and growth and are struggling to remain competitive. Domino’s Pizza is expected to overtake Pizza Hut by two-thirds in 2020, while Pizza Hut’s sales are expected to grow by less than one-fifth of that figure in 2020.
Its pivot to takeout
With its recent pivot to takeout, the fast-casual chain has shifted its focus to the family-friendly takeout segment. It’s a smart move for a company that’s famous for its artisanal made-to-order Pizza. However, Pizza Hut is one of many in the fast-casual takeout space. Another popular family-friendly chain is Domino’s, which specializes in fresh, made-to-order Pizza.
Last year, the company brought back its iconic logo and introduced new menu items that were popular decades ago. It also launched a new campaign for its “original” pan pizza, aimed at past-prime burnouts. In addition, the company is expanding its delivery capabilities, with 30,000 more personal shoppers expected to be hired by the end of the year, equivalent to one-third of the U.S.’ largest restaurant chain.
The pivot to takeout and delivery is a smart one for Pizza Hut, which recently announced the closure of more than 500 of its dining rooms. Despite the drastic reduction in numbers, Pizza Hut’s executives told investors they plan to keep the remaining dine-in locations open.
While Pizza Hut’s pivot to takeout has been a smart one for the company, it does pose some challenges. Many of these locations will likely be recognizable even when they’re closed. With their trademark red roofs and squat bodies, the abandoned Pizza Huts will probably haunt the next business.
Besides Pizza Hut, Yum Brands owns KFC, Taco Bell, and The Habit Burger. The company reported that 57% of its sales last year came from off-premise sales. The parent company is trying to rehire those furloughed by the company. The pizza chain also plans to expand its delivery options, including contactless delivery.
In an economic recession, many companies are moving away from in-store dining and focusing on takeout. With the help of new technology and apps, restaurants are turning to online ordering and delivery options to drive profits. While this trend has hampered many, some companies have flourished by the shift.
Its rebranding as a gourmet pizzeria
After almost 60 years, Pizza Hut has begun a rebranding initiative to appeal to new generations. It has redesigned its logo and stores and expanded its menu. With the slogan “Flavor of Now,” the company hopes to appeal to millennials, the target demographic for its rebranded pizzas. But the change has caused some problems. In the last quarter, sales fell by 3.5% compared to the prior quarter.
One key issue is quality. Pizza Hut needs to ensure consistency in the quality of its products across all of its restaurants. To do this, it developed core guidelines for its employees and ensured they understood their roles. Employees need to be passionate about their work, have positive energy and urgency, and listen to the voice of the customer.
Another issue is pricing. In the 1980s, David Novak, the head of marketing at Domino’s, believed that creating new products would help boost top-line sales. New products would attract new customers and keep them coming back. He and his team combined scientific knowledge and marketing expertise to create new menu items.
The change is intended to shock consumers but will also come with a multimillion-pound advertising campaign to promote the brand. The first TV commercials will break on October 7, while the company plans to invest PS100 million in its restaurants over the next six years. Currently, the company has invested about PS17 million in its 100 restaurants.
The company has faced many challenges in the 21st century, but they have remained a successful brand. It was the first pizza chain to introduce an online ordering system. Customers could place their orders online and post them to the store or home. In 2000, the company became the world’s largest chain of pizza restaurants. By 1980, it had more than 1,000 locations worldwide. The company also introduced pan pizza, which was a big hit.
The brand has also struggled in the millennial market. Although the company has tried several digital strategies to address this problem, its poor performance has yet to turn around. The company has launched a loyalty program called Hut Rewards to combat this. It is hoped that customers will be more loyal to the brand and avoid jumping from one pizza deal to another.
Its focus on millennials
The company is aiming its mobile loyalty program at millennials. It launched this in early 2015, and since then, the company has made significant progress. The brand uses social media, games, and influencer outreach to reach this generation. In addition to millennials, Pizza Hut targets Gen Z and younger millennials.
Millennials are likely to have different dietary needs than traditional consumers, so catering to their specific needs and preferences is crucial. The best way to reach these consumers is to use digital tools like social media and mobile apps. Also, loyalty programs are a great way to attract millennials.
The millennial generation is changing the pizza industry. The younger generation wants healthier options and considers the experience as important as the food. As a result, entrepreneurs in the pizza industry should adapt to meet this demand. It’s estimated that 80 million millennials buy Pizza each year and are projected to outspend baby boomers by 2017.
The new menu features a customized Neapolitan pizza that millennials can customize. It offers hand-tossed, fresh dough. The company defines its approach as fresh-casual, combining the best of fast-casual and fine-casual concepts. The millennials love to customize their Pizza.
As a result, the sit-down tradition is in danger. The company’s corporate ownership recently announced that it would be closing 500 of its dining rooms. This will leave nearly 20,000 locations with delivery-only options. The downhome comfort and familiarity of a Pizza Hut meal are disappearing. Customers, however, have found ways to preserve their memories of the chain. Some are selling nostalgic red plastic cups and steel pans on eBay.