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INNOVATION / MICHAEL SCHRAGE

On-Line Pizza Idea Is Clever but Only Half-Baked

August 25, 1994|MICHAEL SCHRAGE | Michael Schrage is a writer, consultant and research associate at the Massachusetts Institute of Technology

In Neal Stephenson's amusingly cynical novel "Snow Crash," he describes a future where Americans excel at only two things: writing software and delivering pizza in less than 30 minutes. . . .

Hold the cheesiness! Apparently, the folks at Pizza Hut take these sorts of scenarios seriously. The nation's largest pizza home delivery service has just launched its PizzaNet on line. Why phone or fax your order for a 14-inch extra-cheese, half-mushroom, half-pepperoni with onion-- hold the oregano! --pizza when you can order it virtually via the Internet? It's the Geek Chic way to nosh.

"The hardest part was to get the Internet connection in," confides Jon Payne, Pizza Hut's director of point-of-sales development, who is overseeing the technical aspects of the PizzaNet pilot in Santa Cruz. "Otherwise, this was very easy to execute . . . almost routine. The cost of doing this was minimal; we had done a lot of the necessary software already."

If Santa Cruz responds well, says Payne, PizzaNet could be rolled out nationwide.

PizzaNet customers need to do more than just log on. To participate in the pilot, hungry Santa Cruzers need computers with Internet access and a version of an Internet interface program called Mosaic. Using the Internet's World Wide Web to access the centralized PizzaNet server at Pizza Hut headquarters in Wichita, Kan., customers see a customized menu for ordering their pizzas. Customers then enter in their vital statistics, along with the orders for pizza and beverages.

This data is then transmitted via the Internet back to Wichita, then relayed via modem and conventional phone lines to the computer system at the customer's nearest Pizza Hut. To minimize the risks of digital pizza pranksters, the local restaurant then telephones users to verify orders. Money changes hands only at the point of delivery.

Now isn't that simple? OK, not as simple as picking up the phone, but it's early in the cyberpizza game. And Payne reports a few Net-based orders have already begun to trickle in.

Still, as computationally clever as on-line ordering may be, it misses the point of what this medium can do. Fundamentally, there's not much difference between ordering a pizza over the phone and ordering one on-line. The transaction is basically a commodity. The trick is to figure out new ways to create value for the customer.

Instead of simply letting people order a pizza, why not let them design it as well? Instead of showing an ordinary menu with a list of toppings, show a picture of a pizza with the toppings clustered on the side. Let teen-agers and college students build their own pizzas on-screen. Present a palette of toppings and let people place their mushrooms and green peppers and pepperoni anywhere on the pizza they want. The real pizza is customized accordingly. In other words, computer-aided pizza engineering.

This is precisely the sort of interactivity that computers and networks are good at. There can be as much value in the design--maybe more--as in the transaction. So sell it! The pizza home delivery market is more than $6.4 billion a year. Surely, a lot of those people would be prepared to pay a little premium to custom-design their own pizza.

Indeed, a Pizza Hut or Domino's might even be able to sell its "pizza design" software to customers. Turn making the family pizza into a video game. Needless to say, this software makes transaction management easier for the pizza company. So everybody can win.

It's important to remember that this doesn't require any new technology. This can all be done over the Internet today, if some enterprise is willing to make a small investment. There are countless opportunities for entrepreneurs to offer customers a blend of designability and delivery.

Here's another example of what MIT Media Lab associate professor Michael Hawley likes to call the "Media Fab" potential of the Internet. Why not customized T-shirts? Log on to the Internet and browse through assorted logos and designs. Mix, match and modify them to suit your interest. Then superimpose them onto the virtual T-shirt on the screen. Hit the right key and within 48 hours your new shirt is Fed-Exed to the desired address.

Of course, this network designability concept easily extends to bouquets of flowers, boxes of chocolates, fruit baskets and the $6.85-billion annual market in mail-order clothes shopping. It would be perfect for all kinds of gift giving.

Where's Barry Diller when you need him? This--not QVC or Home Shopping Network--is how the most profitable interactive shopping will be done tomorrow. The ability to customize your choices in an entertaining and intriguing way is something people are prepared to pay for.

"The point is, what we want to do is make it fun to order and have fun with it and turn our product into a service," says Pizza Hut's Payne. "I suspect there will be some element of entertainment involved to make this thing really go. . . . I expect to get a lot of creative ideas over the Internet about what we should do next."

In the meantime, somebody should send Neal Stephenson a pizza. He deserves it.

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