Point, click, pizza?

That's how Amanda Paulson and a friend ordered their breadsticks and pizza - half Italian sausage, half ham - from Papa John's in downtown Ann Arbor earlier this month.

Paulson logged onto the pizzeria's Web site and with a few clicks, customized her pizza, placed her order and paid for it with her credit card, tip for the delivery driver included. She quickly got an e-mail that confirmed the order and gave an estimated delivery time of 30-40 minutes.

"It's just easier to order online because you don't have to talk to anyone and you can figure out your order as you go,'' said Paulson, 20, a biology sophomore at the University of Michigan. "It's really simple to use, and they have pizza suggestions and coupons - you don't always have a coupon in front of you.''

In addition to Papa John's, Pizza Hut and Ann Arbor Township-based Domino's Pizza Inc. are offering online pizza ordering. Domino's has been quietly testing online sales in select markets, including Ann Arbor, where it's been available for at least six months. Some industry watchers think the Internet could revolutionize the way the pizza delivery industry operates in the years to come.

"The technology has made a lot of headway in the past few years,'' said Stan Garber of Cleveland-based ONOSYS, a company that develops software for online food ordering. "2007 has been the year that (trade publications) Pizza Marketplace and Fast Casual are saying will be the break out of online ordering.''

Consider that:

• Hoyt Jones, who owns seven local Domino's Pizza franchises, said online orders made up 5-10 percent of all his orders in 2006, and he expects that to grow to 15-20 percent this year - meaning one out of every five Domino's pizzas in Ann Arbor could be ordered via the Internet.
• Papa John's, which offers online ordering through all of its 2,600 U.S. locations, expected its online business to double last year to $200 million in sales, likely about 20 percent of its total revenue - and the Kentucky company thinks that kind of growth could continue for the foreseeable future. It expects thousands of online orders for Super Bowl Sunday, Feb. 4, the pizza industry's busiest day of the year. 
• Just last week, the United Kingdom and Ireland franchise of Domino's Pizza said its e-commerce platform continues to be its fastest-growing marketing tool, attracting a record number of new customers in 2006 and showing sales growth of 43.8 percent - and that's on top of 70 percent sales growth in 2005.

Indeed, selling pizza online is a virtual pie that most of the big chains are vying to get a slice of - especially since sales were sluggish in much of 2006.

Bottom line boost

Beyond the initial investment, the economics of online ordering can help just about any pizzeria.

Domino's United Kingdom franchise said the dollar amount of online orders was 25 percent higher on average than orders placed by phone - a boost that could potentially make a big difference for companies like Domino's, whose global retail sales hit $5 billion in 2005.

"Some of these stores get so busy, it's difficult to get through on the phone, (customers) are put on hold, they feel rushed, they haven't heard all the specials,'' said Steve Coomes, an industry expert and senior editor of PizzaMarketplace.com.

"The customer who is Web savvy and comfortable with doing this loves the ability to browse without feeling rushed - and they not only spend more ... but they fine-tune their order more, like 'I didn't know they had that topping,' '' he added.

Online ordering allows the consumer to peruse the full menu and submit an order at their leisure, choosing to pay online or in person. Papa John's allows orders to be placed up to 21 days ahead of time.

It also frees up workers at the pizzeria to handle other customer calls or help make pizzas, and the database that is created by online orders gives the company a targeted group to market to.

"Eventually we think it will result in some labor efficiencies somewhere down the road,'' said Papa John's spokesman Chris Sternberg.

Jones, who has offered online ordering at his seven local Domino's for about six months, said the process "is pretty seamless.''

"If you are in the store and an Internet order comes in, a bell goes off,'' Jones said. "It seems like it just continues to grow and grow in popularity as more people realize we have it.''

Growing demand

Although no one source accurately tracks worldwide online pizza sales currently, many industry experts project double digit sales growth in next few years for pizzerias with online ordering systems.

"When is the last time you ever bought an airline ticket from an actual travel agent?'' asked "Big Dave'' Ostrander, an Oscoda-based former pizzeria owner who is now a food service industry consultant and speaker. "The same thing will happen with pizza.''

The same thing is already happening with other types of fast-casual food, said Garber. While pizzerias make up the bulk of his young company's clients, Onosys also works with Chili's Grill & Bar and Quiznos Sub.

"It comes down to the fact that the chain across the street is going to get it and if you don't, you could lose a lot of customers,'' Garber added. "Now the independent stores and smaller chains with online ordering are taking customers away from the Pizza Huts or Domino's.''

Arguably the leader in online pizza sales, Louisville-based Papa John's - the thirdlargest pizza chain - launched its online sales presence in 2001.

Meanwhile, the world's two biggest pizza chains, Pizza Hut and Domino's, have yet to make online ordering available systemwide. Detroit-based Little Caesars Pizza Inc. does not offer online ordering, nor does Madison Heights-based Hungry Howie's Pizza.

Domino's declined to talk in-depth about its online system because the pizza delivery company is currently rolling out online ordering in select markets, spokesman Tim McIntyre said.

"From our perspective, offering online ordering will be required of us by consumers in the near future,'' McIntyre said. "We hope to make online ordering not just an easy, but a fun option for consumers. We're looking to provide online ordering that is unlike what consumers are currently accustomed to.''

Pitfalls exist

For the time being, McIntyre said most of Domino's customers still prefer to order by telephone versus computer.

"I just think people enjoy the one-on-one personal contact, and you lose that,'' agreed Bob Brosnahan, chief operating officer of the Ann Arbor-based Cottage Inn Pizza chain. Cottage Inn doesn't have online ordering and while Brosnahan said he's not opposed to it, it's not something the pizzeria is currently working on. "People love to call and talk to the same people ... and you are trying to build a relationship.''

Setting up a chainwide online ordering system can also be cost-prohibitive, depending on how many stores are involved. That's why it's easier for mom-and-pop pizza shops to do it compared to Domino's, which has more than 8,200 stores worldwide. Papa John's spent about $15 million to get its system going at its 2,600 pizza stores, Sternberg said.

"It's just turning a bigger ship and it takes longer, especially with (a pizza company like) Domino's,'' Coomes said.

In some cases, franchisees may need to shell out money to put online systems in their stores, and it can be tough for the corporate headquarters to convince those who are adverse to the change, Coomes added. Some worry online orders could overwhelm their stores.

Still, it appears the benefits outweigh the pitfalls, especially since online customers generally say they are more satisfied with their experience than offline customers. "It's got win written all over it,'' said Larry Freed, president and CEO of Ann Arbor-based ForeSee Results, a company that measures customer satisfaction of Internet sites.

"You never get put on hold when you order online,'' said Sternberg.

Contact Stefanie Murray at smurray@annarbornews.com or 734-994-6932.