When Pizza Hut ordered a delivery-first strategy

A year into its delivery-focused strategy, CMO Neha talks about the brand’s 90% digital media spends, balancing its delivery app with aggregators, and its increasing store count.

“Pivot, Pivvott… Pivoootttt,” yelled an exasperated Ross from F.R.I.E.N.D.S because he along with Rachel and Chandler struggled to move a couch up a flight of stairs.

Now, imagine Pizza Hut's mood when it decided, last year, to toss all its energies into pizza delivery than its popular dine-in restaurants.

For a pizza brand known for its spacious restaurants since its Indian debut in 1998, prioritising delivery is hard. “You have to be where the consumer wants to access you,” says Neha, chief marketing officer, Pizza Hut India; it is a nod to the new business reality since the pandemic.

A year into the making, this pivot of the strategy was not a sudden jerk says Neha. “We had started veering towards delivery around five to seven years ago, but it was something consumers may not have perceived immediately because we were a dine-in heavy brand.”

The major step Pizza Hut took in its delivery-first push was to order a new smartphone app. It was a long-term initiative she reveals and says the brand felt it was important for consumers to have an easy access point because they see pizza as something you should be able to order quickly and at affordable price points.

“It has been four to five months since the app’s launch and we have already surpassed where we were with the old app in terms of downloads and how the business is growing on it,” remarks the CMO.

The right balance

If a food brand wants to win, it has to lead delivery service with its app/website and not depend entirely on food delivery and aggregator platforms like Swiggy and Zomato. These aggregators, however, offer discoverability which is crucial for Pizza Hut in its quest for delivery supremacy.

What Pizza Hut has learnt, as per Neha, is the audience which visits these aggregators do so for their gamut of features on offer and not due to a single brand’s presence on them.

"The audience which visits our app is more loyal to us and gives us a lot of stickiness," she explains and says Pizza Hut "keeps some offers exclusive to its app as a way to lure consumers."

Adding to this, she says big holidays like Independence Day or Republic Day mean a high usage of the Pizza Hut app. Why? Because consumers realise food aggregators will see a lot of traffic and so it is better to visit a food brand’s app because consumers will receive better and faster delivery service.

A young brand in the making

Pizza Hut, in 2020, launched boxes that included a pizza, a side, and a drink. Recently, it launched the Flavour Fun range wherein consumers can order pizzas with different ingredients and sauces for a starting price of Rs 79. The latter is aimed at generation Z and young job workers who are likely to order in multiple times a week.

These menu items are not only a move to catch a certain consumer cohort's loyalty but an effort to offset Domino’s Everyday Value offering as well as the Stunner Menu from Burger King or McDonald’s McSaver Meals, among others.

“We realised we have to talk to a younger audience if we want to continue to grow,” reveals Neha and says Pizza Hut wants to become a preferred choice for everyday events be it a weekday meal or a weekend celebration or a snack post-college.

She also admits “Pizza Hut has to work a bit in aspects of affordability and accessibility… being able to offer our items at the right price for consumers was on our do-list for a while and that is how Flavour Fun came into being.”

The advantage she feels about Flavour Fun is the variety of choice on offer at an affordable price point which consumers do not find in the market when they choose food items at affordable price points; they are offered only the basic food items.

A constant churn of innovation

One of the biggest challenges for QSRs is to constantly churn out new and tasty items. Pizza Hut’s last two new offerings were the Momo Mia Pizza and the Kebab-e-Crust Pizza.

When asked if there is a calendar for new launches, the CMO says Pizza Hut is constantly working on a pipeline because “you have to create products which are not only tasty and appealing but are replicable in every store, and that becomes a different kind of challenge.”

From KFC teaming up with Maggi to McDonald’s launching burgers with patties oozing cheese to pizzas with khakra for a base, the Indian QSRs today are in a state of flux. Every player must feel some form of peer pressure to frequently come up with something unique.

Neha does not feel this pressure because if food brands, under peer pressure, dole out stuff which is not tasty and just for buzz, it will boomerang badly. “People will slam you on social media saying you have launched a product just for buzz and that is the worst kind of advocacy,” she remarks and warns that the “food industry is not forgiving.”

A whole new world, online only

Pizza Hut, for the past few years, has spent 90% of its budget on digital advertising. Why? “Digital has allowed us to become more targeted which I think is a joy we didn't have in the TV era,” says Neha. The investment has delivered a 5X return over any other media for the QSR giant.

She explains all of the pizza giant’s advertising leads back to its app. Whether “we are promoting Momo Mia Pizza or the Flavour Fun range, the Order Online or Download The App call to action is part of every communication."

Within the digital advertising sphere, videos have worked in Pizza Hut's favour as compared to static content and so has digital audio. Pizza Hut advertises on e-comm giant Amazon too.

A noteworthy aspect of Pizza Hut's media spends was its disappearance from TV. The last big TV ad campaign burst from the QSR brand appeared in 2019 when creator Bhuvan Bam became its face.

This love for experimentation from the strategy to the menu to the media spends is at the core of Pizza Hut’s marketing and Neha reveals the brand spends “around five to seven per cent of its budget every month on experiments.”

Pizza Hut, however, four weeks ago, made a return to the big screen at homes. “… the reason is experimentation,” she admits and says they are “using television from a reach perspective.”

Old remains gold

One would assume Pizza Hut to cut its store count once its delivery-first strategy was enforced. It did the opposite.

Pizza Hut is expanding its store count “in different cities and expanding deeper into certain cities,” says the CMO. The QSR brand opened its 700th store in August this year; it inaugurated its 500th store in August last year and has entered 80+ new cities across India for the first time since 2020.

The new stores are not your regular Pizza Hut restaurants or Pizza Hut Delivery outlets. They are “FCD or Fast-Casual Delco” which, the CMO explains, are “40-60 seat assets with an open kitchen plan, ordering at the counter, and service at the table.”

Built for delivery and takeaway, the FCD was the brainchild of Pizza Hut global. They are located in and around residential neighbourhoods and are “a sweet spot for dine-in, delivery, and takeaway”.  

Now, only if the brand could pivot a FCD or two near this writer's residence.