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​Pizza Hut eyes digital, data transformation in pizza wars

Pizza Hut's digital transformation offers a little bit of everything including a point-of-sale consolidation, analytics and easier online and mobile transactions.

In the pizza wars, the food and taste comparison serves merely as table stakes. The real war will be won via technology.

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At least that's what Yum! Brands' Pizza Hut is hoping. As Domino's Pizza positions itself as a food delivery company armed with technology, digital engagement tools and mobile ordering, Pizza Hut is in the middle of a digital transformation that---from an information technology perspective---offers a little bit of everything.

  • An emphasis on customer data and engagement to replicate Yum's success with marketing to Taco Bell customers.
  • A digital platform that will boost online sales and market to customers better. Accenture CEO Pierre Nanterme cited Pizza Hut as one of its key reference digital transformation customers. Nanterme said Thursday on Accenture's earnings conference call:
We are helping Pizza Hut build and operate a new cloud-based digital platform to transform the customer experience and boost online sales. The new platform will also enable Pizza Hut to expand its digital marketing capabilities through enhanced customer segmentation, analytics and mobility.
  • A system consolidation effort. Greg Creed, Yum CEO, said last month at an investment conference that Pizza Hut can win on the food and value fronts. Technology has been limiting. Creed said:
We hope in the third quarter in Dallas to be testing a next generation sort of delivery experience, which we will be hopefully able to roll out sometime in 2016. Primarily limited really by technology and our ability to -- our issue is we had nine point-of-sale (POS) systems, its little hard to be writing apps and getting thinks to link to nine POS systems, so what we're really doing is moving to one POS system, so that we can use that as the sort of catalysts to transform the whole digital experience.

Pizza Hut's situation isn't unique. Multiple industries are being upended by digital transformation. These industries---every one of them will become digital---typically have a first mover and then rivals that play catch up. In the Pizza Hut scenario, Domino Pizza is seen as the tech leader by analysts. Domino has online ordering, rich customer profiles, orders via text, Twitter and Smart TVs and Android Wear, Pebble and Apple Watch apps.

Related: Domino's Pizza's appetite for risk | Crowdsourced menu drives Domino's launch of Pizza Mogul | Domino's Pizza gets customer specific using geospatial analytics

It's safe to say Domino Pizza is digital.

Pizza Hut also has online ordering and apps, but Yum has admittedly struggled to connect the data dots into better sales performance.

Creed noted that KFC and Taco Bell have been performing well, but Pizza Hut's turnaround will take time.

Perhaps the biggest takeaway from the Pizza Hut tale is that the digital techniques will vary, but the pizza duels will be decided by customer engagement. Whether customers are connected to a brand in person, through an app or online data that leads to repeat business wins the day. That reality is one reason that Salesforce is largely betting its future growth on mobile customer service.

Creed said last month that Pizza Hut has a strong customer database that'll be a key asset once the company's tech ducks are in a row.

We've got the great thing about Pizza Hut compared to KFC and Taco Bell is we have this amazing database on those customers, we know where they live, we know their phone number, we know their email address, so we've got a couple of Ph Ds in math and statistics and we've really dug into the data and we shared that analysis with our franchisees to demonstrate fact based where we've lost business, what were those customers looking for and what we got to do to get them back. So I'm very comfortable there we're doing some really good thinking, it's based on a really great data analysis and we will act swiftly and accordingly.