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

Domino’s ‘Tips’ Customers for Pickup

With ongoing labor challenges making the economics of delivery even more difficult than usual, Domino’s is doing everything in its power to outsource the labor of picking up its pizzas and bringing them to consumers’ homes to the customers themselves.

The pizzeria chain announced in a Monday (Jan. 31) press release its most on-the-nose such initiative yet, promising to “tip” consumers when they order carryout with a $3 credit for their next carryout order.

“Domino’s is giving a $3 tip to online carryout customers who take the time and energy out of their day to act as their own delivery drivers,” said Domino’s Executive Vice President and Chief Marketing Officer Art D’Elia in the release. “After all, we think they deserve it.”

The promotion is part of the chain’s ongoing push to incentivize adoption of pickup channels. Simultaneously, the pizza giant is also looking for ways to make the economics of delivery work better.

Read more: Domino’s Looks to Outsource Delivery to Customers With Self-Pickup of Pizza

The brand’s New Zealand branch, for instance, announced in a Thursday (Jan. 27) blog post that it is expanding its drone delivery trials in the country, offering an autonomous alternative to the labor-intensive channel.

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

At the same time, businesses that depend on delivery drivers to fulfill small-volume orders are making headlines as the cost-heavy model comes under inspection. For instance, ultrafast grocers are under new scrutiny after a report that they can lose as much as $20 on average per order.

Read more: Ultrafast Grocers’ Losses Mount in the Face of an Uncertain Future

For restaurants, many consumers are willing to make the trip for pickup. Research from PYMNTS’ 2021 Restaurant Readiness Index, created in collaboration with Paytronix, found that 34% of quick-service restaurants’ (QSRs’) sales come from pickup and mobile order-ahead channels, while 42% come from online delivery, phone delivery and aggregator channels.

See more: QSRs’ Lagging Loyalty-Reward Investment Hurts Innovation and Sales

Additionally, the study found that 44% of consumers said they believe that the ability to pick up orders without standing in line will be key to restaurants’ future success, as did 46% of managers. Similarly, 39% of consumers said they believe that curbside pickup will be crucial, as did 46% of managers.

Moreover, upgrades to the pickup experience are highly in demand, according to data from PYMNTS’ “The Digital Divide Report: Minding The Loyalty Gap,” created in collaboration with Paytronix. The study, which featured the results of a census-balanced survey of more than 2,400 U.S. adults about their restaurant habits, found that 28% cited pickup-related upgrades as the features that would go the furthest in encouraging them to make restaurant purchases.

Read more: Restaurants Compete to Make Loyalty Programs Stand out as Consumers Join Multiple Programs

“I think our operators think a lot about digital orders for pickup being a highly profitable ordering type and service model for them,” Noah Glass, founder and CEO of digital ordering and delivery Software-as-a-Service (SaaS) company Olo, told PYMNTS’ Karen Webster in an interview last May. “Thinking about, ‘How do I drive the consumer to effectively be their own delivery driver?’ Just noting that someone’s got to pay for delivery. Delivery’s expensive. Either it’s the restaurant, or it’s the consumer.”

See more: Olo’s Noah Glass on Powering the $1.6 Trillion ‘Eats’ Ecosystem