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Big Orange Slide

Friday, September 3rd, 2010

A killer app-etizer: big pizza in ’09

October 29, 2009 by Mike Sutton

Picture 1 A report from Forrester’s Consumer Forum 2009 in Chicago, Illinois.


The theme at this year’s conference is “The Three Dimensional Consumer: Creating Breakthrough Multichannel Relationships.”

The three dimensions are Information, Transaction and Help. The challenge is that consumers are increasingly going online for all three, yet digital channels’ flat, one-dimensional experiences tend to leave consumers feeling empty and disconnected.

In his presentation “Advertising Without Ads: How Pizza Hut Approached the New Marketing Universe”, Pizza Hut’s VP Marketing, Bob Kraut outlined his organization’s approach to the challenge, and their commitment to digital strategy in 2009.

Loyalty is a big challenge in the pizza chain business, says Kraut. Consumers regularly switch between multiple brands, so large brands such as Pizza Hut have to pump out new offers and promotions every four to six weeks to stimulate the market and fight to be the pizza of choice.

The key insight for me in the presentation is that although consumers were not loyal to the restaurant, Pizza Hut found that consumers would be loyal to a particular channel of ordering pizza: their iPhones.

Pizza Hut’s solution? iHut – launched last summer.

Some results:

Tons of downloads. Over the past few months, they have had more than 600,000 downloads of the app and more than $1 million in sales since it launched. It’s now the #2 most downloaded app in the App Store’s “lifestyle” category.

A bigger piece of the online pie. Online ordering is something that they’ve offered for a while, but the iPhone app now accounts for 30% of all online orders and the number is growing every month.

More profitable transactions. They’ve found that the online customer is more profitable and spends on average $2.50 more than the offline customer.

Coupons still work. When they launched the app, they offered a 20% discount on certain menu items when you downloaded the app.

New customers. Kraut also talked about some research they’ve done that leads them to believe that the app has led to new customer acquisition.

Loving the haters. People who had been Pizza Hut rejectors in the past are now customers.

Win with better design. The app itself is very slick, easy to use and nicely designed. So much so, Apple featured the app in one of its TV spots. It’s part pizza ordering app, part game. The app leverages the abilities of the iPhone to allow you to create the exact pizza you want.

A new way to order pizza, pasta and wings. A new channel for Pizza Hut to deliver a fulfilling and convenient experience for their customer. A new way to treat consumers like real people.

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