Pizza Hut Europe is launching its first UK loyalty programme as it looks to reward customers amid growing competition in the food delivery market and the increasing popularity of food delivery in the life of British consumers.
The Hut Rewards programme will enable customers to earn a special reward currency called ‘slices’, with one slice earned for every £10 spent. The rewards are split into three different levels: five slices and consumers receive a free side, for seven slices they get a free medium pizza and for 10 slices they are rewarded with a free large pizza. When consumers hit the 10-slice point and redeem it the programme restarts.
Hut Rewards is only available with delivery orders placed online or via the Pizza Hut app, which currently make up 80% of total orders.
The rollout, which began on 26 November across more than 400 locations nationwide, makes the UK the first market in Europe to introduce the rewards programme following its successful launch in US and Canada in 2017. Going forward, the idea is that Pizza Hut’s franchisee partners across Europe will be able to replicate the rewards platform.
The ambition is to make Hut Rewards the “easiest and richest loyalty programme in the food delivery segment”, Stephan Croix, chief sales and brand officer at Pizza Hut Europe and UK, tells Marketing Week.
Bringing loyalty to the food delivery market
Prior to launching Hut Rewards, Pizza Hut carried out three months of intensive research including in-depth interviews with consumers and tests involving multiple different iterations of the programme.
What came out strongly from the research was the need for the scheme to be easy to understand, easy to sign up for and easy to earn and redeem. It was also crucial to make the rewards generous and attainable, enabling consumers to redeem the benefits early in their order journey.
Looking at other sectors where loyalty programmes are common, such as for hotels, airlines and supermarkets, it felt like the right moment for Pizza Hut to make its move into loyalty, says Croix.
We have spent a lot of time simplifying and making it easier and faster for consumers to order a pizza online. The next stage was to close the loop with the loyalty programme/
Stephan Croix, Pizza Hut
To date, loyalty has not been a defining feature of the food delivery market, however with brands like Deliveroo, Uber Eats and Just East driving the mainstream adoption of delivery for all different genres of food, loyalty programmes look set to become more relevant in the food delivery space.
“Loyalty is super important, it’s probably at the heart of any retail driven business today across pretty much any industry you can think of. At Pizza Hut the online customer journey is really at the heart of our strategy,” he says.
“We have spent a lot of time simplifying and making it easier and faster for consumers to order a pizza online and for us the next stage was naturally to close the loop with the loyalty programme.”
The rollout of Hut Rewards marks the latest development in Pizza Hut Europe’s focus on digital. This has included improvements to its website and online ordering system, powered by the creation of new innovation hub Pizza Hut Digital Ventures (PHDV).
Two years ago, Pizza Hut decided to bring previously outsourced digital and ecommerce skills in-house with the establishment of PHDV, which is focused on enhancing the customer experience.
The team of 25 working within PHDV include digital experts with skills from coding and server architecture to user experience, design and product management. Since their introduction, Pizza Hut has reduced the number of steps involved in ordering a pizza and seen its conversion rate rise by 50%.
The role of loyalty schemes
Pizza Hut’s move into loyalty comes at time when brands from fashion to travel are rethinking how to run their programmes in the most effective ways.
In October fast fashion giant Asos axed its A-List loyalty programme after it failed to engage customers who preferred its Premier Delivery service. John Lewis and Waitrose announced in September they would trial bringing their loyalty schemes together, while in August airline Virgin confirmed its existing programme Virgin Red would be integrated into a new scheme.
Pizza Hut, however, believes that from a strategic point of view this new focus on loyalty fits perfectly with the company’s ‘easiest, fastest, tastiest’ brand promise. Croix explains that it is important for Hut Rewards to be fully integrated into the online journey in a seamless way that requires a simple one-click action to sign up with your name and email address.
The business expects there to be multiple opportunities to use the data gathered through the Hut Rewards sign-ups to refine the experience for users.
“The first one is to allow us to build a better dialogue with our existing customers and make sure the dialogue is more relevant and more frequent. If you think about the type of offers they would get and the pizzas we would promote to them, if you are vegetarian you don’t want an offer for a meat topping,” says Croix.
“Having that data it really is going to allow us to enrich the dialogue with existing consumers and give them more of what they really want.”
He also sees this as an opportunity to build stronger relationships with potential new customers who do not regularly choose Pizza Hut and help the brand refine its menu based on what it learns about consumer preferences.
The rollout of Hut Rewards will be supported by a call-to-action on all pizza boxes in the UK and at point-of-sale, while the loyalty programme is set to become a core element of Pizza Hut’s future advertising campaigns.
Pizza Hut’s delivery and restaurant businesses are two separate entities but Croix’s team are considering the possibility of bringing Hut Rewards to the dine-in experience.