Domino's new loyalty programme may pull traffic away from Zomato and Swiggy

Customers can buy online or offline, from Domino's own platform or from partner websites like Zomato or Swiggy; but to redeem points or get a free pizza, they will have to use Domino's property

The new loyalty programme of Jubilant FoodWorks, which owns the India franchise of Domino’s Pizza, makes sure that customers can use any platform to buy products but they return to the company website to redeem, said management in the earnings call.

According to recent reports, Jubilant Foodworks in a letter to the Competition Commission of India (CCI) said that it will move some of its business away from food aggregator platforms such as Zomato and Swiggy if they increase commission rates.

In the earnings call, Ashish Goenka, executive VP and CFO, said the company's newly launched loyalty programme, Domino’s Cheesy Rewards, is a simple milestone-based model, under which the customer gets a pizza free after every six eligible orders.

“We are making this an omni-channel programme, that is, irrespective of the point of entry or a point of order of the customer, they should be able to enjoy the benefits of the loyalty programme. However, the burn can happen only on our own assets, which would also drive more traffic onto our own assets,” explained Goenka.

Goenka added that this therefore, not only helps them build the frequency, but also drives more traffic on their own assets. “So, twin benefits of the programme are: drive frequency and attract new customers.”

In other words, a customer can now buy any product from the Domino’s Pizza menu from any platform, online or offline, from Domino’s own platform or from partner websites like Zomato or Swiggy. However, to redeem points or get that free pizza, they will have to use Domino’s property.

To an analyst question on news that they are rethinking their engagement terms with food aggregators, Goenka said: “This has been a part of a concerted stated strategy that we look at always promoting and improving our own assets and migrate traffic more and more on to our own assets, which gives us better control and better profitability. So, that strategy continues, I don't think there is any change in that.”

On whether food aggregators have increased commission rates, Goenka said: “We have a strong engagement with Zomato and Swiggy. They are a very important partner and channel for us. We have not seen any pressure or increase or change in the kind of commissions or commercials that we have with these platforms.”

In addition to this the company also announced the acquisition of Roadcast Tech Solutions, a SaaS based platform for management of last mile delivery options. “I think it provides end-to-end delivery management solutions to monitor and manage vehicles, as well as feel stuff in real time. And we see a number of areas of driving collaboration and synergies with Roadcast. And I think this would be a long-term strategic tie-up and an investment for us, and it should play out well in the long term,” said Goenka while giving the rationale of the acquisition.