Should retailers ‘tip’ customers to pick up orders?
Domino’s Pizza is giving its customers a $3 tip if they pick up their food orders rather than have them delivered.
The pizza chain is making the move in the lead up to the Super Bowl, its busiest day of the year, knowing it may not have sufficient staff in some areas to keep up with demand. The company typically sells around two million pizzas on Super Bowl Sunday.
“It takes skill to get pizza from a Domino’s store to your door,” Art D’Elia, Domino’s executive president – chief marketing officer, said in a press release. “As a reward, Domino’s is giving a $3 tip to online carryout customers who take the time and energy out of their day to act as their own delivery drivers. After all, we think they deserve it.”
Domino’s offer does come with caveats. Customers who place orders online through May 22 will be eligible to claim a $3 coupon code, which they may use for a carryout order placed the following week. The chain is allowing customers to add their $3 “tip” to other offers it has on carryout orders for even more savings. A $5 minimum purchase is required.
Domino’s challenge is common in foodservice and retailing where businesses have seen a marked increase in online ordering since the outset of the pandemic nearly two years ago. Companies, already struggling to maintain sufficient staffing, have taken a further hit from the outbreak of the Omicron variant as infected or exposed workers are forced to take time off.
The high cost of deliveries is putting pressure on margins and a growing number of retailers are offering incentives for customers to pick up. Petco offers a 15 percent discount on curbside pickup orders of $50 or more. Pet Supplies Plus is currently running a two-day offer (ends today) that gives customers 25 percent off any curbside pickup order ($50 maximum discount).
Amazon.com’s Whole Foods business offers free curbside and in-store pickup for Prime members but charges a $9.95 fee for deliveries. The chain said the fee enables it to sell groceries online for the same price as in-store and helps cover the costs associated with the service.
- Introducing Domino’s Carryout Tips: Because You Earned It – Domino’s Pizza Inc.
- Whole Foods goes from free to $10 grocery delivery fee for Amazon Prime members – RetailWire
DISCUSSION QUESTIONS: Do you expect more retailers to offer financial incentives for customers to pick up their online orders rather than choosing delivery? What are the keys for retailers looking to differentiate their pickup options when so many other companies offer similar services?