American Style Pizza in ItalyDIGITAL SERVICES, RESILIENCE AND CONTACTLESS DELIVERY IN THE COVID ERA, THIS IS HOW DOMINO'S PIZZA ITALIA, WITH BOCCONI'S ALESSANDRO LAZZARONI AS CEO, IS MANAGING TO WARM THE HEARTS OF ITALIANS. EVEN DURING THE COVID CRISIS
Selling American pizza to Italians? "Not a risky business venture in the least. Anyone would have done the same after evaluating the company, the market and the opportunities," says Alessandro Lazzaroni, an Economics and Finance graduate and today CEO of Domino's Pizza Italia and Master Franchisee, i.e. the first entrepreneur of the chain for the Italian market. “In 2015, when there was a chance to import the most important brand worldwide in the home delivery pizza sector, market research suggested that Italians were very dissatisfied with the quality of home delivery pizza. But Domino's customers were extremely satisfied. We also knew that the trend of food delivery was growing rapidly, along with solid expertise in every country where it is located (Domino's Pizza has more turnover outside the US than domestically). After all these assessments, there was only one question: Are there any weaknesses?"
Have you found any yet?
The only difficulty, now as then, is to increase recognition and convince the consumer to give us a try. From the moment a new location opens, the retention rate is high because people like the Domino's service and it boasts features that traditional home delivery pizzerias cannot: the possibility of ordering online, paying by credit card, monitoring the order, pizzas delivered at a temperature of at least 70°C and specific delivery times.
How has the organization handled the impact of Covid?
The consequences of the lockdown had relatively little impact on the operations of our restaurants. With our business model, we were ready to respond proactively and comparing the situation with colleagues from other countries allowed us to understand what was happening in advance. We were the first in Italy to activate a contactless delivery service (delivery without any contact with our drivers) and adopted all safety regulations before the first decree was issued on 9 March. In addition to having all the necessary know-how, skills and technology, another element that has differentiated us is that of always managing an internal fleet of drivers, thus being able to guarantee high safety standards even in the "last mile," right up to the customer's home. To date, although carry outs and on location consumption are possible again, the home delivery service represents 80% of our sales.
As a manager and entrepreneur, what tools and knowledge did you draw on to deal with this phase, and what will you take away from managing this emergency?
Every crisis, no matter how serious, can be faced in two ways: submissively or with a spirit of resilience. The second way is the right one. To do this, you need to be clear-headed, able to analyze the situation and identify possible solutions and have the collaboration of the entire team to come up with a real action plan. This will certainly continue to be one of the most difficult and intense moments, but I have also learned a lot in more recent months. For example, to persevere in achieving goals by reinventing yourself and adapting to evolving situations that are often beyond our direct control.
Considering the restaurant crisis, is the pizza business countercyclical?
Almost all traditional pizzerias in Italy focus on table service as their main offer. This emergency must push the whole sector to reinvent itself and find new ways to adapt to new market needs. In my opinion, the combination of pizza and home delivery remains a winning alliance because it combines a product with an ever-increasing demand and an effective service even during the crisis.
You have been defined as a Digital Company Selling Pizza. What’s the added value of being digital?
At Domino's over 70% of our sales are from our app and website. This also allows us to collect and manage data with all the most modern tools, including geolocalized targeting, knowledge of the customer and analysis of customized offers. In this regard, however, I must say that we also focus a lot on personal contact and proximity, encouraging dialogue between store managers and the local community, schools, oratories, neighborhood organizations.
What’s the difference in approach to the Italian market between Domino's and, for example, McDonald's or Starbucks?
If we're talking about the product, for years McDonald's has focused on its standard offer to make inroads with consumers and has only recently added more Italian products to its historical line. Domino's, on the other hand, immediately combined local demands and tastes. I admire what Starbucks is doing, but it is still too early to make analyses.
Is franchising the most effective tool for expansion in Italy?
I think so. For the first two years we opened stores with direct ownership to acquire more know-how and experience. After establishing reference KPIs, we opened up to local entrepreneurs with franchising because we needed their commercial drive and their energy.
Domino's has managed to make pizza a global product around which a multinational with a strong brand can be built. Isn't this a bit of a missed opportunity for Italy?
Yes, but there are so many missed opportunities in food, large-scale distribution, clothing... We Italians are good at creating business opportunities linked to excellent craftsmanship but we’re not as good at building industrial systems. Conversely, Italy is not an easy place to win over, in food as well as other sectors, as the Italian consumer is used to high quality standards.
"I was attracted to international finance and large investment banks, but my graduation grade initially prevented me from entering that field." Closed doors, however, did not stop Alessandro Lazzaroni, CEO of Domino's Pizza Italia. "After graduation, I participated in McDonald's internal growth and training program, a wonderful experience that allowed me to learn all the mechanisms of a company from the inside." In the meantime, he enrolled in SDA for an evening Master in Administration and Control and, not satisfied, continued seamlessly with an MBA. "I knew it would have been better to gain professional experience before starting my post-graduate studies, but that way I was able to return to the doors of the companies that had rejected me at 29 with an MBA in my back pocket." The first to let him in was Bain & Company, followed by Galbusera, where Lazzaroni was Retail Director and Commercial Director for the Tre Marie brand. Until 2015, when, to start his Domino's Pizza adventure, he became an entrepreneur and bought the rights for It
by Emanuele Elli
Translated by Jenna Walker