Brief:

• Domino's Pizza has expanded its number of hotspots — designated delivery locations like parks, sports fields and beaches that don't have a traditional address — to more than 200,000, according to its quarterly earnings call on Wednesday. The pizza chain launched the program in April with 150,000 hotspots, and later opened the floor to customer suggestions for more locations.
• CEO Richard Allison said on the call that the company was pleased with early results from the Hotspots program, but because the rollout mostly happened in Q3 2018, he couldn't discuss it in a conference call about Q2 results. He said the hotspots haven't negatively affected the speed of service because they're within existing delivery areas and are first approved by franchisees that must carry out the deliveries.
• The company isn't expanding the Hotspots program outside of existing delivery areas because of the increased cost associated with getting a pizza further away from the store. Domino's gradually is tightening its delivery territories as part of an effort to expand its takeout business and ramp up its delivery speed.

Insight:

While Domino's couldn't provide much detail about its Hotspots program, except to say it was pleased with early response from franchisees and customers, its continued growth is a positive signal for the tech-focused pizza chain. After launching the service in April with the help of its franchisees, Domino's soon marketed the program directly to consumers with a lighthearted commercial and its first ad in The New York Times that asked for consumer feedback on future hotspot locations.

Domino's continues to prioritize investments in technology and mobile features to enhance convenience for its customers. Mobile ordering is an important strategy for reaching smartphone-savvy consumers in search of convenient and affordable food. Along with its Hotspots program, Domino's has pioneered other mobile-driven tech, launching its vaunted "pizza tracker" service in 2008 and testing self-driving delivery in Miami in a pilot program with Ford Motor and Postmates. Domino's first started testing self-driving pizza delivery in Ann Arbor, Michigan, last August.

Since the pizza tracker launched, Domino's has continued to upgrade its ordering system with a voice recognition feature powered by artificial intelligence to automate pizza orders made over the phone. CEO Allison has said the chain is broadening tests of the automated phone ordering and expanding the PULSE point-of-sale (POS) system to more than 12,000 stores worldwide, including several new international markets, as Domino's faces greater U.S. competition from delivery companies like GrubHub, Uber Eats and DoorDash.