NEW YORK ( TheStreet) -- Domino's Pizza (DPZ) - Get Report wants to ensure a savory pizza ordered online or via a mobile device arrives as if it came straight from the oven -- piping hot and with the cheese and toppings sticking to the crust and not the box lid.
So the pizza delivery giant is moving forward with its roll-out of a futuristic new delivery car, designed to improve customer service and keep its sales trend hot.
The pizza delivery car has long been a source of ridicule for pizza customers. Nothing like cracking a few jokes on the 17-year-old pizza delivery kid, who cruises around in a beat-up jalopy that looks like it came off a Detroit assembly line in 1985. The joke, however, was often on the customer, because a car that deserved its day in the wrecker likely meant the delivery of a sloppy-looking pizza and soda destined to explode.
The experience, pardon the pun, likely left a bad taste in the customer's mouth, perhaps sending them to a McDonald's (MCD) - Get Report, Burger King (QSR) - Get Report or Wendy's (WEN) - Get Report for a dose of fast food instead.
In June of last year, Domino's took a step to address the obvious inefficiency of the rickety delivery car by unveiling a concept car called the "DXP," a company code name for "delivery expert." Among its many external marketing features, including a brightly-lit Domino's logo on the roof, there are actual functional features, such as, extra-large cup holders, added storage, and a pizza warmer that can be accessed from outside.
Now Domino's, which has a leading 27.4% market share of the pizza delivery business based on consumer spending, is finally preparing to deliver its DXP car to franchisees willing to be early adopters.
"The DXP should be rolling off the line in early fall of this year," said Tim McIntyre, a Domino's Pizza spokesman, in an email to TheStreet. McIntyre added, "We expect about 120 of them to be built, and a number of franchisees around the country have purchased them -- from 1 to up to 10 by our bigger franchisees who see them rolling around their markets in a big way."
The car will have a Chevy Spark body, and is being redesigned and built by an automotive engineering team at Roush in Detroit, a group known for its aftermarket fabrication work on Ford's (F) - Get Report Mustang. Domino's declined to disclose the car's price tag.
As more franchisees open their wallets to invest in the DXP cars, this could be good for Domino's business and, as a result, good for its shareholders. Domino's Pizza shares have surged 34% in the past year, outperforming rivals Papa John's (PZZA) - Get Report and Yum! Brands (YUM) - Get Report (owner of Pizza Hut), which have risen 25% and 5%, respectively, over the same time period. Domestic same-store sales for Domino's rose 7.5% last year, capped off by an 11.1% increase in the fourth quarter. Same-store sales in North America for Papa John's increased 6.7% in 2014, while at Pizza Hut sales fell 1%.
A large ingredient in Domino's share price and sales out performance has been its knack for outflanking its rivals in the use of technology to boost sales. Over time, the new delivery car should further enhance Domino's tech initiatives.
The car is likely to be more reliable than ones already in use by franchisees, which means delivery times could be reduced. According to Domino's, a higher percentage of delivery orders are placed digitally, compared with carryout orders that are also placed digitally. In total, Domino's now has about 50% of sales coming from digital channels, with mobile devices alone comprising roughly half.
Globally, Domino's estimates a run rate of approximately $4 billion in digital sales annually. For their part, Papa John's has about 50% of its sales derived from digital channels, while Pizza Hut clocks in at 40%. Domino's recently introduced ordering via a voice assistant named "Dom", using such devices as a Samsung smart television or Android smartwatch to place an order.
Overall, the likes of Domino's, Papa John's and Pizza Hut account for about 55% of the U.S. pizza delivery market, based on reported consumer spending. The remaining share rests among the regional and mom and pop chains.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.