Why Pizza Hut needed third party delivery to stay competitive

Pizza’s biggest national players have invested in new 3P delivery partnerships in order to compete on digital and attract new customers.

While first-party delivery (1P) had long been Pizza Hut’s main focus for digital customers, the brand has had to shift its strategy to remain competitive. Pizza Hut had been losing market share on their direct channel since the beginning of 2021 to competitors such as Domino’s and Little Caesars. Pizza Hut’s 1P market share was down 2pp YoY in August 2022.

To combat this and attract new customers, they focused on 3P platforms, and as of August 2022, third party made up over 5% of their digital sales.

1P Market Share by Restaurant

US, Third Party | January 2021 - August 2022

3P Share of Sales by Restaurant

US, Third Party | January 2021 - August 2022

By shifting their strategy and focusing on third party delivery, Pizza Hut was able to attract customers that were net-new to ordering from Pizza Hut digitally (i.e., had not purchased on Pizza Hut’s direct channel for over two years). With the exception of April, these new customers also ordered more than customers migrating from their direct platform.

Additionally, the brand was able to regain some customers that had previously lapsed on Pizza Hut’s own channel (i.e., were previous customers on Pizza Hut’s direct channel but hadn’t purchased since October 2020).

Pizza Hut 3P Indexed Orders by Customer Type

United States | October 2021 - August 2022

Sources: Email receipt data

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