Papa Murphy’s Takes 'N’ Bakes A Digital Transformation

papa murphysThe wonderful thing about ordering food online is that you can get what you want quickly and accurately, without ever once talking to the indifferent high school stoner taking your order through a choppy phone connection.

It’s like consumer nirvana, and it certainly explains why restaurants delight in talking about their upgraded ordering systems. Case studies extolling Domino's Pizza’s digital prowess are about as common as extra cheese. And Papa John’s boasted late last year how it was the first of all QSR pizza shops to notch 50% of its sales in digital and mobile.

And the other paternal pizza place – Papa Murphy’s – is fully aware of all the dough digital has generated for its competitors.

“People have a higher average order online,” said Jayson Tipp, the take-and-bake chain’s chief development officer and SVP of technology. Papa Murphy’s is just starting to see that benefit. During the company’s Q2 earnings call in August, CEO Ken Calwell said average check orders placed online were 25% to 30% higher than those placed either in-store or called in – the two channels that have dominated Papa Murphy’s orders.

But the company’s broader ambitions, which Calwell outlined during the earnings call, only begin with a new point of sale (POS) system and online ordering (both of which he expects to be fully rolled out by mid-2016).

These initiatives will enable Papa Murphy’s “to compile the customer information that is the data foundation for digital precision marketing [which] will enable us to target our customers with personalized digital messages and offers, designed to drive current purchase behavior based on an individual’s history,” Calwell explained.

Papa Murphy’s is banking on these efforts driving awareness, frequency of visits and increased order size.

The POS – the linchpin for the initiative – is still being rolled out.

“At the store level, all the pricing and discount and customer information ... happens in the POS,” said Tipp. “We’re still building out our precision marketing platform. Without the POS systems in place, we don’t have the capability to gather information at the store level.”

Topping Tipp’s functionality wish list is an ordering solution that can remember frequently ordered items.

“Our target consumer is moms and dads with families who are very busy and are trying to provide a high-quality home-cooked meal,” he said.

This capability might seem pretty simple to the casual observer – after all Amazon, Netflix and a host of digital-first companies remember customer preferences. The fact that consumers take such features for granted, however, belies the underlying complexity of the data integration needed to make it work.

“At the heart of this, you’ve got customer data, information and preference,” said Mike Brinker, global practice leader at Deloitte Digital, which describes itself as a digital consulting agency and is building out Papa Murphy’s ecommerce platform.

Other data layers heaped onto the pie, he said, include transactional data from the POS systems, menu and ingredient information, promotions, taxes and local tariffs that affect regional pricing, credit card data that needs securing and analytics that enable intelligence around how the whole solution is performing.

“This is truly a complete digital transformation,” Brinker said. “It’s transforming the entire ecommerce and digital channel of [Papa Murphy’s] business.”

So what’s expected to come out of the oven in mid-2016, when these systems begin to activate across all Papa Murphy’s chains?

“The bottom line is the ordering capability has to be more seamless and integrated into the consumer's life,” Brinker said. “It must remember their orders and be available through all channels.”

It might also require increased digital media activation. Papa Murphy’s mostly spends in traditional advertising channels, said Tipp – TV, radio, print, email and SMS. It also operates some bank card loyalty programs and online display, though it’s not “heavily involved.”

Will those traditional channels be adequate in promoting a new online ordering system? It’s unclear, but Papa Murphy’s certainly knows it’ll need to drive traffic in order to get the business results it wants.

So far, it hasn’t put the “marketing muscle” behind publicizing the online ordering system in the limited areas where it’s already rolled out. So while online orders are growing, they “remained small,” said Calwell during the earnings call.

“Once we launch the new ecommerce platform, we will be in a position to put significant marketing resources behind online ordering, which will increase consumer awareness and trial,” he added. “Ultimately, we believe the number of orders online will accelerate to meaningful mix of overall transactions and sales.”

 

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