2021 will be a marquee year for Pizza Hut: Neha
Ahead of Pizza Hut's 25th anniversary in India, CMO Neha lets us in on the brand's plans for digitization, store expansion, product innovation and market strategy
What started in 1996 with a single store in Bengaluru, Pizza Hut, owned by Yum! Brands, today is one of the most popular QSR ranges in India with more than 470 stores across the country. The brand has been constantly on a transformational journey to suit the changing moods and diversifying tastes of Indian consumers. As it completes 25 years of its existence in the country amidst a raging pandemic, which has severely impacted the in-restaurant operations for itself and its many peers, the brand is looking forward to introducing pathbreaking delivery innovations this year. In a recent conversation with exchange4media.com, Pizza Hut Chief Marketing Officer Neha talks about the brand’s journey thus far and what 2021 has in store. Edited excerpts follow:
Tell us more about the brand journey that Pizza Hut has had in India.
It has been 25 years since we have been existing for the love of pizza in the Indian market. ‘Trust in every Bite’ has been a priority for us and we have always adhered to industry best safety and hygiene measures. Independent consumer surveys have judged us the ‘Most Trusted Brand’ for 13 years in a row, which is an unparalleled achievement on its own.
But the best of all is that we have what many others don’t, which is, happy memories. We are not a transactional, assembly line brand and have always attempted to give special memories to customers that they can cherish for life. This exceptional place that we have in people’s minds and hearts has been our biggest earning in these 25 years.
How has the brand transformed itself over the years to suit the changing socio-economic paradigm of the country?
At Pizza Hut, our mission is to be R.E.D., that is, being Relevant, Easy and Distinctive for our consumers by being agile and changing constantly to match their evolving tastes and requirements. A great example of this is the Fast Casual Delco (FCD) restaurant format that we pioneered in India to match the fast-paced lifestyle of our millennial-minded audience.
These offer seamless integration of dine-in, takeaway and delivery services, all under one roof, for maximum customer convenience. All FCDs have an open kitchen, allowing customers to see their food being cooked and be assured that it is being prepared with utmost safety and hygiene, which is extremely critical today.
Similarly, the brand has been on a transformational journey focused on delivery and digitization. By 2022, we expect over 70% of our sales to come from the delivery and takeaway channel.
All this is being done on the back of our 'digitize or die' strategy. We are creating the best-in-class suite of owned digital assets like the app, m-site and website that are easy to use. We are investing more in relevant, digital-first services such as contactless delivery, takeaway, dine-in and curbside services. We are using data analytics for CRM to sharpen our customer targeting and increase efficiencies. Even on the marketing front, we have pivoted to a digital strong media approach to reach our audience.
2020 had been a year of disruption for the F&B category. How did the brand deal with the situation?
When the pandemic hit in 2020, trust became extremely important and being a trusted brand for 25 years in India has helped us in a big way. We immediately took several safety and hygiene measures to ensure trust in every bite. We also demonstrated operational agility and responsiveness to customers’ needs, for example, by starting Contactless Delivery within 48 hours of the lockdown. We also added the Contactless Takeaway and on-the-go takeaway. Slowly, as the lockdown eased, we started contactless dine-in services by implementing end-to-end digitized menu viewing, ordering and payments.
We also realised that in times of crisis, consumers were flocking to the familiar and there was a rise of a new frugal majority. This meant that consumers were cutting back on spends, and at the same time, were seeking comfort in the familiar. In lieu of this, we launched value deals on popular products like BOGO or Hut Treat Meal with up to 43% savings, meant for group orders as entire households were confined inside. We also launched ‘My Box’ for solo consumption as people were conscious of sharing food.
Given the second wave of the pandemic is hitting the country right now, what challenges do you foresee for the brand and the category?
The second wave of the pandemic is definitely proving to be much tougher on everyone. Consumers have trusted us for 25 years in India and we know they are depending on the brand in these uncertain times for that familiar comfort, trust and convenience.
Given the contactless services and safety measures that we augmented last year, we are much better equipped to navigate these challenging times. Our focus on Trust in Every Bite has held us in good stead and customers have had the confidence to continue ordering from us despite the pandemic outbreak last year. We see this robust growth continuing in 2021, especially on our Contactless Delivery channel where the focus is on expanding our delivery offerings at a great value. Plus, our increased focus on digital media and up-gradation of digital assets will ensure that the brand is present wherever our customers are most likely to find us and order from us.
How is 2021 looking for the brand?
The year has been going great thus far. Our owned digital platforms are growing at >50% and have outperformed every other sales channel on big important days like New Year’s. Similar trends were seen on key celebratory occasions like Republic Day and Holi. Our app ratings have leap-frogged both on Google and Apple app store to more than 4.5. Same-Store Sales Growth which is a key indicator of success in our business, grew at an average of more than 25% in the last quarter of 2020 owing to a surge in delivery and takeaway channel and is steadily improving in 2021. Dine-in coupled with continued growth in delivery and takeaway channels saw us closing Q1 in 2021 with positive growth vs. last year. From an average daily sales perspective, the first quarter of 2021 was almost equal to our pre- COVID average.
What are your plans for the year ahead?
2021 is going to be a marquee year for us in terms of store expansion, product innovation, digitization and marketing strategy.
Going forward, we plan to open stores in over 19+ new cities, which we are entering for the first time ever, to increase penetration in Tier 3 markets and beyond, like Tirupati, Jajpur and Palakkad amongst others. This will further elevate our presence in small emerging cities, which is at 30% as of now. In parallel, we will expand our presence in Tier 1 cities, as they are still underpenetrated from a pizza category perspective and offer massive scope for growth. In terms of physical stores, 90% of the new stores will be in the FCD format that I spoke about earlier.
On the product front, we will be expanding our menu based on consumer insights. We will add to our core pan pizza line-up and build further on our range of Indianized pan pizza toppings. We are also working on some buzzworthy product innovations and will continue to add variety to our appetizers and desserts menu. We will also introduce signature F&B items which were previously only available on dine-in, to the delivery menu.
In 2020, we laid the foundation for establishing relevant and distinctive value propositions on our delivery channel. These include abundant deals like Hut Treat Meal where you save up to 43%, competitive pair offers like BOGO and individual combos like My Box for people wary of sharing food. In 2021, our focus will be to further build the value pyramid, focused on the delivery channel and redeemable on our owned assets.
We will launch exclusive coupons to encourage a-la-carte buying from the delivery menu or Limited Time Offers on bestselling combos which are online-only. For example, we currently have the fantastic 4 combo and various coupon deals under the Hut Premier League campaign for the ongoing cricketing season. Earlier, for Holi and Valentine’s Day, we had heavily promoted deals with a beverage giveaway on our best-selling products across digital mediums.
Upgradation of our owned digital assets including the website, m-site and mobile app will continue in 2021, for a faster and more seamless ordering and payments experience. This will help accelerate acquisition, drive conversions and increase retention rates.
Efforts are also on to further strengthen our CRM initiatives. This will help us offer personalized experiences to customers, sharpen targeting, create more effective marketing campaigns and better understand customer loyalty.
We will be capturing and closely analysing customer feedback to improve products and services, through social media. Location data tracking and geofencing tools will be deployed to increase our delivery efficiencies and save on operational and delivery costs. We will also soon be launching Bring Your Own Device (BYOD) to enable a best-in-class, safe ordering experience for our dine-in consumers.
What role will marketing be playing in all of this?
Customers need to feel invested in and must be able to trust the brands they engage with. Therefore, our marketing strategy is focused on understanding the current needs of our consumers and reflecting that in all our communication. We are fortunate to work with the best minds in the industry. Currently, we have Creativeland Asia as our creative and digital agency partner and Mindshare, GroupM and iProspect as our media partners. They have been an incredible support to us, especially since the pandemic broke out last year and we see the relationship growing stronger amidst these tough times.
During the lockdown last year, we had launched the #QualityTimeNotQuarantine campaign on our social media platforms, which urged people to be optimistic while staying at home and appreciate the extra time that they have got with themselves and their family during this time of crisis. Social media also helps us stay connected with consumers round the year, and we keep doing topical buzzworthy campaigns around special days on our owned platforms and through influencer collaborations.
This year, an additional focus will be to roll out distinctive and consistent campaigns to embed our delivery messaging in the minds of customers. We currently invest 90% of our total marketing budget on digital mediums. This focus on digital marketing will continue, both for customer acquisition and engagement, as it gives us 5x ROI compared to any other media. Music, cricket, news and gaming have emerged as well-performing genres for us and we will use these platforms extensively to deliver the right communication to customers.
Tell us more about your foray into the purpose-driven marketing space. How do you think it will impact the brand image?
The future belongs to brands that genuinely care and respond to the needs of consumers, employees and communities, especially in a time of crisis. We take this responsibility very seriously and our various initiatives reflect that.
For example, when the COVID-19 outbreak happened last year, Pizza Hut came up with the #QualityTimeNotQuarantine campaign that I mentioned earlier. We also launched a COVID-19 relief initiative by providing fresh and hygienic meals to medical and frontline staff at government hospitals across a few cities in India.
Today, we continue to speak about the courage shown by our Hut Heroes in carrying out their duties on our social media pages. Even our partners have been doing their bit to motivate them. We have designated ‘Trust Champions’ at our outlets across India, whose main responsibility is to make sure that staff and visitors are strictly adhering to all laid down Safety and Hygiene measures in the kitchen and dining areas. They also ensure that customer concerns if any, are managed on the spot.
Do we expect any big campaign launch this year?
As things remain uncertain, both our consumers and the larger ecosystem are evolving rapidly. Therefore, we are constantly reworking our marketing calendars and updating our plans to stay relevant to our customers and cater to their changed mindset in the best possible way.
When news of IPL being suspended was announced earlier in May, we also paused our Hut Premier League campaign that was underway for the cricketing season. While our plans are being calibrated, 2021 will definitely see us expanding across the country and launch several product and delivery led innovations that will be industry-firsts.
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