restaurants

IPhone Is Pizza Hut's Latest Ordering Twist

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When it comes to trying to harness social media to get an edge in the increasingly brutal fast-food wars, Pizza Hut certainly isn't alone.

But Pizza Hut is somewhat unusual both because of the intensity of its social media focus and because it's specifically seeking to promote its profile as a social media innovator.

The chain has promoted its hiring of a "twintern" to manage its Twitter and social media presence, as well as the twintern's first tweet, which was devoted to announcing free stuffed pizza rolls on July 4, to celebrate Pizza Hut's Facebook fans reaching 1 million.

Pizza Hut has also reported that it has the most-searched food/restaurant site on the Web, and that its average of nearly 4 million visitors a month is by far the largest in the pizza category.

The online and social media buzz not only provide a cost-effective means of announcing and marketing product launches and promotions, but is serving the crucial function of getting out the word that Pizza Hut is "the leader in new and emerging ordering formats in the pizza category."

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That message is critical because fast ordering and delivery are increasingly important sales points for Pizza Hut and other major pizza chains that are now competing not only with super-cheap value menus at other fast-food chains, but growing sales of take-home frozen pizzas.

Pizza Hut's easy-ordering platforms already included its site, a widget on Facebook, and text messaging. And now, the chain has officially announced the launch of a new iPhone and iPod Touch app, which has been in beta since July 8.

While a growing number of QSRs are creating branded iPhone mobile ordering apps --Burger King launched one in late May, for example -- Pizza Hut's offers "interactive capabilities second to none" and the "ability to order pizza and wings in ways never done before," CMO Brian Niccol said during a Web press conference on Wednesday.

The iPhone app enables users to virtually "create" their own pizzas by scrolling, tapping and tilting their phones to choose a crust and toppings. Or, they can scroll and tap to choose their preferred style and sauce for Pizza Hut's new chicken wings -- then "shake and pour" the sauce over the wings. A click also allows ordering Tuscani pasta items, the successful line introduced last year, from a virtual waiter's tray.

"Millions of our customers turn to social media platforms as a fun and convenient way to communicate with their friends, so it's a logical step for Pizza Hut to use social media as a fun and convenient way for our customers to place orders," Bernard Acoca, Pizza Hut's senior director, digital marketing, commented in an email to Marketing Daily. "Pizza Hut products are available in the social spaces that are important to our customers. The more unique touch points for ordering we offer them, the stronger we make our bond with them."

While Pizza Hut continues to lead the pizza QSR market by a wide margin, parent company Yum Brands reported this week that the chain's U.S. same-store sales declined by 8% during the second quarter, causing a 1% overall decline in Yum's U.S. same-store sales despite gains at sister chains Taco Bell and KFC.

Yum has been reporting softness in Pizza Hut sales since the start of this year, and chairman/CEO David C. Novak acknowledged in reporting the Q2 financials that the chain is the company's "biggest challenge in the U.S." because it competes in a "more discretionary, higher guest-check, dinner category."

"Pizza Hut is challenged because it's relatively high-ticket" -- competing more directly with fast-casual chains than with the burger giants and other traditional fast-food options, sums up Frost & Sullivan research analyst Christopher Shanahan.

Novak also stressed, however, that Yum remains confident in its strategy of "transforming" Pizza Hut by broadening its lines beyond pizza, to include pasta and chicken.

Shanahan says that he would expect to see Yum scale back on advertising for Pizza Hut in favor of continuing its focus on KFC, in particular. Yum's massive support of the Kentucky Grilled Chicken launch (with a little help from Oprah) is paying off: KFC's same-store sales saw a "substantial positive turnaround" in the second quarter, after a decline of 7% in the first quarter, Novak reported.

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