Domino’s Drone Push Lifts Last-Mile Delivery Fight to New Heights

Domino’s Pizza boxes

In even the best of labor markets, food delivery has never been the most solid business where margins are concerned. Now, as demand for off-premises meals remains elevated post-2020, and as restaurants and delivery services have difficulty finding driver labor, it is even trickier (and more important) for brands to find a solution.

Domino’s, for its part, an incumbent in the meal delivery space, has been looking to a range of different solutions to ameliorate its delivery woes. Most recently, on Thursday (June 23), Domino’s New Zealand drone delivery partner SkyDrop announced that it has completed production of the drone fleet for its commercial delivery trial with the pizza chain. The trial is expected to go live in the months ahead.

“We believe drone delivery will be an essential component of our pizza deliveries in the future,” Domino’s Group CEO and Managing Director Don Meij said in a statement when an expansion of the trail was announced in January. “Customers benefit from the convenience of having fresh, hot pizzas delivered with zero contact to their homes by electrically-powered drones, which also reduces traffic congestion and greenhouse emissions.”

Related: Domino’s Pizza Drones Take Flight Again in New Zealand

As far as automating the delivery process is concerned, the pizza giant is not only looking toward the skyways but also toward the roads. In the spring of 2021, the chain announced a partnership with autonomous delivery company Nuro, which creates self-driving vehicles that operate on public roads, to launch robotic delivery in Houston, Texas.

Read more: Domino’s Partners With Nuro To Launch Autonomous Delivery

Even with Domino’s decades of bringing pizzas to consumers’ doors, the brand has not made a profit off of the delivery itself.

“We struggle a little bit understanding the long-term economics in some of the aggregator businesses,” Domino’s CFO Stu Levy said on a call with analysts in February 2021. “You know, in 60 years, we’ve never made a dollar delivering a pizza. We make money on the product, but we don’t make money on the delivery, so we’re just not sure how others do it.”

You may also like: Domino’s Casts Doubt On The Future Of Aggregators

In addition to finding ways to reduce the labor needs associated with the fulfillment channel, Domino’s has also been making an effort in the recent past to drive adoption of its pickup channels, effectively outsourcing the delivery labor to consumers. In the most literal iteration of this initiative, the brand announced a promotion to “tip” consumers for online carryout orders.

In a statement at the time, the brand’s executive vice president and chief marketing officer Art D’Elia noted that the initiative was designed to thank them for taking “the time and energy out of their day to act as their own delivery drivers.”

See also: Domino’s ‘Tips’ Customers for Pickup Amid Push to Shift Delivery Labor to Consumers

The move also helps drive adoptions of the brand’s digital ordering channels. According to PYMNTS’ monthly Provider Ranking of Mobile Order-Ahead Apps, which ranks restaurant apps using a proprietary combination of publicly available information and app usage data to which PYMNTS has access, Domino’s app is tied in first place with Taco Bell, Starbucks and Dunkin’ for the top mobile ordering offering.

Additional details: Top Mobile Order-Ahead Apps See New Competition in June’s Provider Ranking