"Very early entry" with AR takes Domino's into uncharted food retail territory

"Very early entry" with AR takes Domino's into uncharted food retail territory

With $1.6 billion in online sales worldwide representing almost two-thirds of its business, Domino's Pizza Enterprises (ASX: DMP) is upping the ante to make sure it stays at the vanguard of digital tech development. 

The company is now around two months in since the launch of an augmented reality (AR) Pizza Chef for its ordering app in Australia and New Zealand, after a prototype garnered strong interest from customers.

The group's move into AR followed the introduction of artificial intelligence (AI) voice interaction ordering through the Alexa-enabled Amazon Echo service at the beginning of 2018.

Harnessing Apple's and Google's AR products as well as 3D rendering tool Unity, the Australia-based global group has brought its pizza bases, sauces and toppings to life on smartphones, kind of like a Pokémon GO for food with "a billion plus combinations". 

The approach may seem like a mere novelty or even a gimmick to those outside the AR space, but it is worth noting that over the years Domino's has achieved many milestones with technologies that have since become commonplace.

"This is really a first in our industry - a very early entry into any retail space for AR, and what we needed to do was make sure the experience felt quite native and intuitive to the end user," says Domino's Group chief digital and technology officer Michael Gillespie. 

"AR is obviously new and in AI there are new adventures, and you don't necesarily have a clear playbook.

"But we never had a clear playbook for on-time cooking, Pizza Chef or even when we did our GPS driver tracker."

When the company's pizza tracker was introduced in 2006, Domino's changed the nature of food ordering by giving customers greater control over their ordering experiences. 

"At that point of time to real-time track a product from store to a door, that wasn't being done really anywhere for something that's being delivered within a 20-minute period," says Gillespie.

"Every project we've done in the technology or innovation space always has its complications or firsts for us, and they might be firsts globally. It's about having the right team and the great attitude internally to make these visions a reality."

The pizza company cites research that shows the global AR market exceeded $1 billion in 2016, with predictions it will grow at around a 65 per cent compound annual growth rate (CAGR) through to 2025.

"So we spent time through the many months of development refining the user experience so our customers could feel quite comfortable the first time they use it,

"You've got this pizza in front of you on the table that's with all intents and purposes in your room when you're looking through your phone. How can we make that as lifelike as possible so people zoom in and move their phone around and it feels like it's actually there, and it's very close to the end product we receive as well?

"So we spent time making sure we get looking at 3D models of the pizzas being built versus 3D pizzas, and then obviously you've got all of the development as well."

But the introduction also brought the question of whether consumers would care, so scoping studies were undertaken to gauge feedback about the idea. 

"You just have to go back and look at what Pokémon did for AR it went from something that people knew was there but never really interacted with, to really making that a little bit more mainstream. It was the explosion of the first really 'wow' of a globally reached AR experience," says Gillespie.

"A lot of technology can have fast growth for us as a business we need to make sure that technology resonates with our customers, and can give them an experience that surpasses what they could get either from a competitor or an in-store experience.

"We created a prototpye. Customers were presented with an opportunity to say 'would you like to use AR Pizza Chef?' and they were given a screenshot of an early concept, and we saw a great audience who actually want to use AR."

That tick of approval was the catalyst for Domino's to move ahead with its partners, and it only took a few months despite the challenges at play.

"There are a billion plus combinations you can create and that's amazing, but then the complication of building that is high; it's not just a retail product where there might be 100 SKUs or 200 SKUs (stock keeping units) and you've just go the red, yellow, green version or large and extra large," he says.

"We actually have a customisable product with billions of ways to do that; if we're going to get into this as a commitment, we saw interest from customers to drive that commitment, and the customers who use it are really appreciating the flexibility and experience that they get.

"The great thing is it's not the way you have to order. Customers that want to use AR, obviously it's already rendered and will use some of the processing power of your phone, but you can still order the way you like if you're not into AR."

Gillespie adds it was important to keep the size of the app down so that it remains convenient.

"The question was how do we deliver it? No one wants to download an app that's five gig - that would be impossible for an app," he says.

"We wanted to make something that's still downloadable easily and you can still make a pizza, but it's not going to take your battery down to zero by the time you've finished your pizza if it's charged."

Gillespie is not able to comment on whether the AR Pizza Chef will be rolled out in other Domino's markets in Europe and Asia, but says it is something Domino's will look at.

"I can't make a commitment that we are or will or won't for those markets," he says, mentioning how the company's Offers app was actually introduced first in the Netherlands before being launched in Australia, followed by further expansion in Europe and Japan.

When asked about the voice-activated at-home virtual assistant, which was developed with the help of specialist group VERSA, Gillespie mentions the AI system is now in an expansion phase.

"We launched that in Australia and are starting to launch it in European markets we've launched it in France with Amazon," he says.

"It's one of those areas where we all know that AI virtual assistants are becoming more prevalent and popular. So just like when we launched in the digital space well over a decade ago and were rather an early entrant globally and especially in our industry in Australia, we see as a great opportunity for learnings, just like it will be for AR.

"We'll be at the forefront rather than sitting back and waiting for these systems to become a lot more advanced from a commercial perspective but then trying to enter."

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