Pizza Hut, Papa John’s To Merge E-Commerce With Social Networks

Written by Evan Schuman
October 19th, 2008

The very premise of E-Commerce is for E-tailers to create a beautiful site, where your customers come to shop. The latest trend, though, is to cut deals with your customers to buy from you anywhere but your site, whether it’s on MySpace or Facebook social networking sites, from a cell phone, in the middle of a Google search or while watching a YouTube video.

Two of the nation’s largest pizza chains—Pizza Hut and Papa John’s—have jumped into this trend this month, but they’re far from alone.

Pizza Hut has rolled out a widget to allow Facebook users to order one of its pizzas without leaving Facebook. Pizza Hut’s Oct. 15 statement said the move made the chain "one of the first companies and the only national pizza chain to offer the ability to order delivery food without ever leaving." It was a curious claim given that its $1 billion competitor, Papa John’s, had made the identical claim a week earlier.

Papa John’s talked about rolling out "a full suite of widgets" for making Papa John’s purchases through quite a few sites, including Facebook and IGoogle, according to Bob Ford, the director of online marketing for the chain of 3,270 restaurants in 50 U.S. states and 28 countries, which dubs itself the world’s third largest pizza company, presumably behind Pizza Hut and Domino’s.

No matter who was first—no one really cares but false hype is false hype—both chains are part of a significant E-Commerce trend. Google is pushing for E-tail and other searches from within its pages, which is a win for both searchers and Google.

It’s often embarrassing how much better the searches are when Google is told to search within, let’s say or, as opposed to using the search capability on each of those sites. But as long as E-tailers don’t prioritize improvements to their site search, Google is going to look quite attractive.

True mobile applications are another example. Borders mobile was designed, for example, to allow purchases from cell phones from customers who need not ever hit the bookseller’s Web site.

In theory, this capability is the ultimate execution of a customer-focused E-Commerce strategy. Let the customer buy from wherever they are, making it as easy as possible. That’s a good thing.

But this strategy is not without risks, of course. Just as an aggressive mobile commerce strategy potentially puts retailers at the mercy of future decisions by carriers, phone manufacturers or mobile OS programmers, the social network move has the potential for forcing retailers to agree to demands later imposed by Facebook, MySpace or any other social network vendor.

Fearful of what happens if Google starts controlling most of your traffic and demands something from you or it will remove your entries? What about its YouTube channel It’s already started techniques to sell directly from within the videos.

It’s a logical and natural move to have an automatic gateway to your site next to videos discussing your brand. But aiding and abetting such a move could ultimately become a gateway for your direct rivals. Do you really want to be in the middle of that bidding war?

At the moment, none of these search, social, mobile or video sites is threatening such extortion moves. In theory, they may never do so. But at this stage, they want to make themselves as inviting and open as possible.

Is that nice marketing manager offering this kind of E-Commerce access to a potential partner or a nicely dressed drug dealer trying to get you hooked, addicted to an easy flow of customers?

These deals make a lot of sense and, for now, there’s no reason at all to resist them. But more so than usual, you might want to invite one of your corporate lawyers to look at the early deals. Nobody knows what these deals will look like in two years, and this is far too early a stage to be trusting.


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